80% BFIs have Passed Merger Proposal

Pressed by the Nepal Rastra Bank (NRB) directives and the need to raise their capital base, nearly 80 per cent of the banks and financial institutions operational at present have passed merger proposals from their annual general meetings (AGM). According to bankers, it is easy to start the merger process once the merger proposal is endorsed by the AGM.

 

“It is easy to start the merger process with the right partner once a proposal for the merger is passed by the AGM. That’s why the AGMs of so many BFIs have passed the merger proposal,” said Rajan Singh Bhandari, President of Nepal Bankers Association and CEO of Citizens Bank. Bhandari, however, said that only 7-8 commercial banks of the total 31 have passed merger proposal so far. “The AGM of Citizens Bank, too, has endorsed a merger proposal. We have done so to make NRB’s merger policy successful,” said Bhandari.

 

According to Krishna Raj Lamichhane, president of Development Bankers Association, Nepal, and CEO of Kailash Development Bank, nearly 95 percent development banks have passed merger proposal through their AGMs. “Almost all development banks are ready for merger,” he said, “They are waiting for the right partner.” 

 

Rajendra Man Shakya, President of Nepal Financial Institution Association and CEO of Synergy Finance Company, echoes the same sentiment. “Around 95 per cent finance companies have endorsed merger proposal through their AGMs,” he said, “Most finance companies want to merge with either a development bank or a commercial bank.”