Machhapuchchhre and Janata banks to merge
The NRB has toldcommercial banks to boost their paid-up capital toRs8 billion within thenext 2 years
Sep 23, 2015-Machhapuchchhre Bank and Janata Bank have agreed to merge in a bid to increase their paid-up capital and fulfil the directive of Nepal Rastra Bank (NRB).
The central bank has told commercial banks to boost their paid-up capital to Rs8 billion within the next two years from the current Rs2 billion. As most banks have been maintaining only the minimum capital requirement, many of them are expected to consolidate to meet the ramped up requirement. After Machhapuchchhre and Janata announced their merger plan, the Nepal Stock Exchange (Nepse) suspended trading of the shares of both the banks on Tuesday. Nepse has warned banks and financial institutions to first inform it about their capital increment plan so that speculative investment by investors can be discouraged.
Prithvi Shrestha, deputy chief executive officer of Janata Bank, said that the two banks decided to merge after agreeing on the swap ratio. According to him, the swap ratio between Machhapuc-hchhre and Janata has been maintained at Rs121 and Rs85 per share. The two banks have planned to apply to the central bank for its blessings soon.
Earlier, Janata had discussed a possible merger with Mega Bank. “They dropped the plan after they couldn’t agree on the swap ratio,” said Shrestha. Currently, many banks and financial institutions are in merger talks after the central bank’s instruction to jack up their capital four-fold.
Published: 23-09-2015 08:58