--By Rashika Pokharel

 

Global IME Bank (GIME) Ltd emerged as a product of successful merger between Global Bank Ltd (a commercial bank) and IME Financial Institution (a finance company) in 2012.  Subsequently, it also merged Social Development Bank (SDB) into it in 2013 and now is awaiting merger with Commerz and Trust Bank Nepal.

 

Global Bank Limited (GBL) was established in 2007 a commercial bank with a paid up capital of Rs one billion,  which was the largest capital base of a commercial bank at the time. The paid up capital of the bank has now increased to Rs 2.42 billion. The Bank has large number of retail outlet and has 73 branches.

 

Merger Pattern: 

 

Merger of IME Financial Institution

R.R Bajracharya, CEO of Global IME Bank says that IME group and Global Bank had common aspects and were interrelated with each other before the merger. Both of these institutions had the same promoters. When Nepal Rastra Bank initially introduced the merger policy, it highly encouraged banks for merger and Global Bank seriously considered merging IME into it. 

 

Examining the prospective side of the merger one good aspect was the strong financial status of IME. It was counted as one of the best financial institutions among existing similar institutions. It had a very good deposit base of around Rs 5-6 billion. The institution was distributing dividend at the rate of around 15-20 percent on an annual basis whereas Global Bank was giving dividend of around 7-7.5 percent annually. Another, major factor behind the successful merger was the strong remittance business of IME. 

 

IME’s Rs 6 billion deposit base, of which 85 percent comprised of retail deposit, was another great prospect for the merger. At the time GBL had retail deposits of around 25 to 30 percent. So that merger was the best way for Global Bank to expand its retail deposit. Prior to the merger, GBL’s deposit was around Rs 21 billion but after the merger it expanded to over Rs 38 billion. The merger provided Global Bank multiple growth opportunities. 

 

Merger of Social Development Bank

The SDB and Global IME Bank merger was purely executed for the sake of capital growth. SDB had a capital of Rs 400 million, which relatively would not have been sufficient for it to expand business. But the merger increased the capacity of GIME. 

 

Merger with Commerz and Trust Bank

As the trust of people in GIME is helping its expansion, the Commerz and Trust Bank Nepal too approached Global IME for merger. “It was a privilege to us that the Commerz and Trust Bank itself approached us for merger. This shows that we have been able to set a benchmark in the Nepali Banking arena”, says Bajracharya.

 

Both banks have agreed for the merger and they are presently awaiting approval from Nepal Rastra Bank. “Within April, we are sure to merge. Almost all the ground work like data migration, synergy creation, back up etc, have been completed,” he says. With this merger, GIME Bank aspires to become a bank with Rs 50 billion deposits and one of the top 5 Nepali banks.

 

Schemes of GIME

GIME is trying to bring schemes that are different than conventional ones. These schemes look beyond profit. It has started public campaign that calls for ‘Bachat Garau’. This initiative is aimed at building saving habit in the general public. “We are requesting people to groom saving habits, and we have not stressed on saving with us. This campaign was launched thinking that if the people save in banks then the lending capacity of the bank will increase. This will ultimately help in mobilizing the national deposit for national interest,” Bajracharya said.

 

Apart from corporate lending, which is a facility of Global IME Bank, it also supports economic activity of the area in which it is conducting its business. It aims to promote local economic activities and encourage small entrepreneurs to meet the requirements of the locale. For this, one and half years ago it come forward with a scheme– ‘Global Small Business Loans.’ This scheme provides Rs 50 thousands to Rs 500 thousands loan to locals for the growth and establishment of small business. The scheme has been a huge success claims Bajracharya and says. Recently other banks have also adopted this plan. 

 

The bank has also extended health insurance benefits to the farmers. This facility provides insurance back up in case of accidents. The insurance’s crucial feature is to help farmers during the time of terminal illness, accidental deaths etc. Along with this, the bank offers ‘Global Agriculture Loan.’ This scheme also has insurance benefits for individual as well as collective farmers.