Nepal Rastra Bank has made the merger of microfinance companies with the cross-holding of banks and financial institutions compulsory.
If a commercial bank, development bank, or finance company owns more than 10% shares in various microfinance companies (case of cross-holding), they will have to submit an action plan for the merger between the microfinance companies. Issuing a directive on Monday, BFIs have been given time till Ashar end, 2079 to prepare the action plan of the merger.
Also, if BFIs have a shareholding of 51% or more on the microfinance company, the action plan for the merger between the companies or acquisition will have to be submitted.
BFIs will have to submit the action plan as to which are the institutions under their purview as per the instructions of NRB.