•      Mon Sep 25 2023

Season of ‘big merger’ of commercial banks, eight banks merge with each other

Global IME Bank and Bank of Kathmandu Chairman sign agreement on merging two private sector banks. (Photo: GIMBL)

Kathmandu: Nepal Rastra Bank (NRB) then Governor Dr Chiranjibi Nepal made a provision of the commercial banks to have paid up capital of Rs 8 billion through the monetary policy of the Fiscal Year 2072/73 BS.

The timeline given for this was until the end of Asar, 2074 BS.

The goal of increasing the paid up capital was to decrease the number of commercial banks. The policy that was adopted that time has turned into reality at present.

Although some commercial banks went for a merger in the meantime, a wave of the latest mergers has reduced the numbers of commercial banks, giving a sense the then goal of big merger.

Eight commercial banks have merged with each other in the month of Poush alone while additional two commercial banks are in the merger phase.

The statement made by Prithvi Bahadur Pande, the Chair of Nepal Investment Bank Ltd (NIBL), during the ceremony announcing the merger of NIBL and Mega Bank Nepal Limited on Wednesday, gave a reflection that the commercial banks are committed to implementing the government’s policy.

Eight banks have merged and already started their joint operation.

The banks which merged in the month of Poush include Kumari and NCC Bank, Global IME and Bank of Kathmandu, Prabhu and Century Bank and Nepal Investment and Mega Bank.

Chandra Prasad Dhakal, Chairman of the then Global IME Bank (GBIME), led the board of directors.

Its members are Krishna Prasad Sharma, Devendra Pratap Shah, Cabinet Shrestha, Ram Bahadur Bhandari, Radhesh Panta and Madan Lal Joshi. Following the merger, the Bank with the paid-up capital being Rs 35.7 billion has become the biggest one.

After the integrated transaction, its capital fund has reached Rs 57 billion. Its deposit collection has got to Rs 410 billion, loan floating Rs 400 billion, and total assets Rs 500 billion. Its branches have reached all districts in the country.

At present, GBIME has a total of 1,100 branches across the country, and three foreign contact offices.

Plan is afoot to set up its foreign contact office in South Korea, said the Bank. It has over 4 million customers, and more than 4,000 employees.

The Bank has merged with and acquired 21 banks and financial institutions so far. The merger aims to carrying out creative and qualitative changes in banks and financial institutions, said Dhakal.