RBB, NIDC to merge soon: FinMin Mahara
Kathmandu, January 23
Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara has said that the merger process of the two government-owned banks — Rastriya Banijya Bank (RBB) and NIDC Development Bank — will begin soon.
Speaking during the 52nd anniversary celebration programme of the RBB, Mahara said that the Ministry of Finance has already given its consent for the merger of two government banks and the proposal for the same will be submitted at the next Cabinet meeting.
The government had established RBB and NIDC for different purposes.
RBB was established as a commercial bank, whereas the objective of NIDC was to support industrial sector of the country. However, the government later developed NIDC as development bank as the institution failed to work as per its objective and a significant amount of loan floated by the NIDC defaulted. The government has also revitalised the RBB through financial sector reform programme (FSRP), as the government-owned bank was on the verge of collapsing due to bad loans.
Currently, both the financial institutions are being regulated by the Nepal Rastra Bank (NRB). After the government’s decision, both the government-owned financial institutions would need to follow the central bank’s rule for merger.