Nabil Bank inks deal to acquire Nepal Bangladesh Bank despite court’s stay order

Published On: January 14, 2022 10:01 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 14: Nabil Bank has signed an agreement for acquisition of Nepal Bangladesh Bank. 

In an agreement signing ceremony held on Thursday, the merger committee’s coordinator from Nabil Bank’s side, Udaya Krishna Upadhyay and the coordinator from Nepal Bangladesh Bank’s side, Indra Bahadur Thapa inked the agreement for acquisition.

Following the acquisition, it has been agreed that all of Nepal Bangladesh Bank’s business transactions will be in the name of Nabil Bank and the Bank’s current board members will remain as the board of directors, according to a notice issued by the Nabil Bank.

Last July, NBB announced an exit of IFIC Bank that owned 40.09 percent shares of the bank from the joint-venture bank. Binod Chaudhary led Chaudhary Group then made its way to purchase 36,827,426 unit shares of the foreign partner of the NBB.  

The Nabil Bank said its paid-up capital will increase to NRs. 22.5 billion after the acquisition of Nepal Bangladesh Bank. Likewise, the Bank’s branch network will increase to 235 and the number of customers will be over 1.6 million. “As a result of the acquisition, Nabil Bank’s deposit portfolio will increase to NRs. 314 billion and loan portfolio will increase to NRs. 300 billion,” the bank said further.

The agreement came a day after the Kathmandu District Court (KDC) issued a stay order barring Nepal Bangladesh Bank (NBB) from selling the promoter shares of its foreign partner, IFIC Bank Limited, Bangladesh, to Chaudhary Group of Nepal.  

A single bench of Justice Ram Chandra Poudel of the KDC had issued the order against the NBB’s plan to sell the share to Nabil Bank, whose majority shares are owned by Chaudhary Group. 

Earlier, the Chairman of Sunrise Bank Limited Motilal Dugad had filed a writ at the KDC, stating that the IFIC Bank had breached the agreement made with him promising to sell the promoter shares.

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