Trading of Machhapuchchhre & Janata Bank halted in NESPE for entering the merger process

Machhapuchchhre Bank Limited (MBL) and Janata Bank Limited (JBNL) have entered into a merger process. Both the banks have signed Memorandum of Understanding (MoU) for the merger. Memorandum of Understanding was signed by the Chairman of MBL, Mr. Birendra Mahato and by Chairman of JBNL, Mr. Uday Nepali Shrestha. Trading of "JBNL" and “MBL” has been now suspended in NEPSE as both the banks has entered into the merger process. The monetary policy of 2015 issued by NRB had asked the banks and financial institutions to hike their paid up capital of four fold. The merger between MBL and JBNL is due to this policy. As per the chairman of MBL, Mr. Mahato, “this is just the beginning of the merger process and there are a lot of things that’s still need to be fixed. As per the source of the bank, the tentative share swap ratio between the banks has been fixed. The share swap ratio of MBL: JBNL stands at 121:85 respectively. Now the bank will file an application for a letter of intent at Nepal Rastra Bank (NRB). At present MBL has a paid up capital of Rs 2.95 arba whereas Janata Bank has a paid up capital of Rs 2.6 arba. As per the agreement of swap ratio, the merge entity will have a paid up capital of Rs 5.75 arba which will be the highest paid up capital among all commercial banks. As per the source of the bank, the merger process will end within 6 months.