Kathmandu, June 28 : The central bank has asked all the 28 commercial banks to express their views and readiness on the possible merger and acquisition (M&A) in the future.
Holding a meeting in the capital on Thursday (June 27), Chranjibi Nepal, Governor, Nepal Rastra Bank (NRB) and other officials urged the chief executive officers and chairpersons of all banks to provide the names of their possible merger partners or submit commitment letter for merger to the NRB before the announcement of the Monetary Policy in mid-July.
“The upcoming Monetary Policy will be geared towards impelling the banks and financial institutions (BFIs) to opt for the M & A of large scale. This is simply crucial to ensure good governance in the banking sector. And, the meeting was mainly focused on discussing this issue with the related stakeholders,” the NRB sources say.
“Lack of good governance in the banking sector has triggered various anomalies like the breach of prudential lending limit and dual financial statements apart from an alarming rise in the operating cost of bank,” they add. The central has been trying to propel the BFIs to go for merger for the last few years by offering various facilities and relations in rules. However, the outcome is not encouraging with only some small institutions rather than big banks opting for merger.
