While some BFIs have already got their merger proposal endorsed by their respective annual general meetings, others have started hunt for capable merging partners.Shine Resunga Development Bank Limited recently signed merger agreement with Gaumukhi Development Bank Limited of Pyuthan. Share swap ratio of Resunga and Gaumukhi has been set at 1:0.9, according to Prakash Paudel, CEO of Resunga Development Bank.
Shine Resunga has paid-up capital of Rs 804.3 million while Gaumukhi has Rs 71.2 million paid-up capital. The headquarters of the merged entity will be in Butwal. It will have 22 branch offices and two extension counters, according to Paudel.
Earlier, Shine Development Bank of Butwal and Resunga Development Bank of Tamghas, Gulmi had merged to become Shine Resunga Development Bank.
Similarly, Bhrikuti Bikash Bank of Butwal along with Prudential Bank, Clean Energy Development Bank and Pathibhara Development Bank has already merged with NMB Bank of Kathmandu. Likewise, Pashchimanchal Development Bank of Butwal has signed merger agreement with Mega Bank. The joint operation is scheduled to start from April 14.
Kulmani Gyawali, company secretary of Pashchimanchal Development Bank, told Republica that they have already sought permission from the central bank to start joint operation. The merger will scrap at least five branch offices of the development bank in Butwal and surrounding areas.
Ekata Bikash Bank of Butwal along with Nepal Awas Finance of Kathmandu is in final stage of merger with Siddhartha Bikash Bank of Kathmandu. The three institutions have already decided to name the merged entity as Siddhartha Development Bank. It will have paid-up capital of Rs 1.14 billion. It is planning to launch 2:1 right issue to meet the Rs 2 billion paid-up capital requirement by Fiscal Year 2017/18.
Dhruba Kumar Paudel, CEO of Ekata Bikash Bank, told Republica that the merger process is at the last stage.
Moreover, half a dozen other development banks of different categories in Rupandehi have got their merger proposal approved by their respective annual general meeting. All of them are searching capable merging partners.
Mahesh Prasad Kafle, CEO of Sewa Bikash Bank, said they were looking for a capable merging partner. "The central bank's decision to raise paid-up capital of BFIs leaves with no option but to go for merger to meet the new capital requirement," added Kafle.
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