Kathmandu, July 5 After Nepal Rastra Bank (NRB) took a stern stance recently to push commercial banks into merger and acquisition, two class ‘A’ banks have decided to merge. Earlier, NRB Governor Chiranjivi Nepal had advised banks to find suitable partners for merger and acquisition prior to the announcement of the Monetary Policy as ‘there wouldn’t be much time afterwards’. During a recent meeting with the chairpersons and chief executive officers of various banks, Governor Nepal had directed the bankers to look for ‘merger partners’ ahead of the Monetary Policy speech. In keeping with this direction, Global IME Bank and Janata Bank Nepal have decided to merge and signed a memorandum of understanding (MoU) today. “We have decided to enter into a merger looking into NRB’s plans, which will be announced through the Monetary Policy speech,” said Chandra Prasad Dhakal, chairman of Global IME Bank. The MoU was signed by Dhakal on behalf of Global IME Bank and Janata Bank Chairman Keshav Rayamajhi. Both sides have agreed to name CEO of Janata Bank Parshuram Kunwar as the chief executive of merged entity and Global IME’s Acting CEO Mahesh Dhakal as his deputy. The new bank will retain the name ‘Global IME’. According to the MoU, the share swap ratio has been set at 1:0.85. This means that investors holding 100 unit shares of Janata Bank Nepal will receive 85 unit shares of Global IME post the merger. However, the final swap ratio will be determined after the due diligence audit (DDA) report is finalised. As per Dhakal, the management teams of both the banks will finalise all the necessary procedures within four months. According to the third quarter report of fiscal year 2018-19, the paid-up capital of Global IME and Janata Bank Nepal stands at Rs 10.31 billion and Rs 8.08 billion, respectively. Similarly, the reserves and surplus of Global IME Bank and Janata Bank Nepal stand at Rs 5.12 billion and Rs 1.75 billion, respectively. Post merger, the joint entity’s paid-up capital will stand at Rs 18.39 billion. At present, Global IME’s net profit stands at Rs 1.87 billion and Janata Bank’s net profit stands at Rs 1.02 billion.