KATHMANDU, JUNE 6
Nepal Rastra Bank (NRB) has introduced additional facilities for class A, B, and C banks and financial institutions (BFIs) going for merger and starting joint operations within July 16.
Issuing a circular today, the central bank has introduced provisions of facilities and discounts for commercial banks that have participated in the process of merger and acquisition, were unable to conduct integrated operations within mid-January, but are able to start joint operations by July 16.It has been decided to extend the deadline of loan disbursements to designated sectors for the related banks.
Similarly, penalty will not be imposed even if the limit of credit-deposit ratio is exceeded on the date of operation of integrated business.
As per the circular, the cooling period of directors and high level officials will be exempted.
Prior to this, the banking executives were not allowed to join another financial institution for at least six months from the date of their departure.
Likewise, if the interest rate difference of the institutions involved in the merger and acquisition is higher than that set by the central bank, a one-year period will be provided to bring the interest rate difference within the set limit.
Also, the deposit collection limit per institution will be increased by five per cent for one year.
After the start of joint operations, the BFIs will not be required to seek approval to merge or close the branch offices operating within one kilometre radius of one another for one year.
A version of this article appears in the print on June 7, 2023, of The Himalayan Times.
