Kathmandu, September 20
Altogether 22 banks have expressed their commitment to go for merger and acquisition process with Nepal Rastra Bank (NRB).
Along with government-owned Agricultural Development Bank and Nepal Bank Ltd, 20 other private banks have pledged with the central bank to go for merger, informed Gobinda Nagila, deputy spokesperson for NRB.
“Of these, Janata Bank and Global IME Bank have already decided to merge, while other banks are expected to start the merger process soon,” said Nagila.
As envisioned by the budget for fiscal year 2019-20 and this fiscal’s Monetary Policy, the central bank had sought progress from banks towards merger and acquisition a few weeks before. NRB had sought the progress towards merger after banks were seen less interested in the merger policy adopted by the government. “However, a notable number of banks have expressed their commitment to go for merger and acquisition,” informed Nagila.
The banks that have expressed willingness to go for merger include Agricultural Development Bank, Nepal Bank, Nabil Bank, Everest Bank, SBI Bank Nepal, NIC Asia Bank, Machhapuchchhre Bank, Janata Bank, Global IME Bank, Citizens International Bank, Sunrise Bank, Mega Bank and Civil Bank, among others.
However, it is to be noted that despite their readiness, banks have been seeking tax incentives from the government for merger and acquisition. Bankers have been urging the government to reduce income tax levied on banks by at least five percentage points for a period of five years for those banks who choose to merge with others.
Through the budget for 2019-20 fiscal year, the government had encouraged banks and financial institutions (BFIs) to opt for merger and acquisition and announced a number of incentives for such banks through the Monetary Policy for ongoing fiscal year including extension of the deadline for banks that go merger to float required loans in agriculture, energy and tourism sectors till mid-July 2021.
A version of this article appears in print on September 21, 2019 of The Himalayan Times.