KATHMANDU: Two Nepali finance companies — Narayani Finance Ltd (NAFIL) and National Finance Ltd (NFL) — officially merged and formed Narayani National Finance Ltd (NNFL) on Sunday. The merger is the first in the banks’ and financial institutions’ history of Nepal.

NNAFL chairperson Ramkrishna Manandhar said, “NNAFL is starting business from today (Tuesday),” he said in a press meet organized here. The merger process started two years ago and a joint meeting of the boards of directors of NFL and NAFIL on May 10 had approved the move.

NFL is a Kathmandu-based finance company with paid-up capital Rs 217.4 million. It had deposit of Rs 878.8 million and invested Rs 898.7 million before the merger. NAFIL, based in Chitwan, had paid-up capital Rs 215.9 million. The company had collected deposit equal to Rs 882.7 million and invested Rs 1,060.5 million. NFL and NAFIL had gained profits Rs 10.4 million and Rs 11.5 million in 2008-09, respectively.

Both the finance companies have good track records of financial performance. NFL had distributed 90 per cent bonus shares and 21 per cent cash bonus from 2003-04 to 2007-08. , NAFIL distributed 95 per cent bonus shares during the period. The new finance company NNFL has paid-up capital Rs 433.3 million.

“We are going to make NNFL a development bank in the near future,” said Manandhar. “NNFL will issue 1:5 right shares next year,” he added. NNFL has six directors on its board — three each from NFL and NAFIL.

NNFL has five branches in Kathmandu, Itahari and Narayangarh, and in Bharatpur and Ratnagar (Tandi) of Chitwan district. “We are planning to add five more branches within this fiscal year,” said NNFL chief executive officer Umesh Singh Bhandari. NNFL is planning to open three new branches in Kathmandu Valley and two outside the valley.