Nabil Bank’s plan to acquire NBB hangs in balance due to ‘staff adjustment’ issue after unification

Published On: June 23, 2022 07:30 PM NPT By: Republica | @RepublicaNepal

KATHMANDU, June 23: The much-awaited unification of Nabil Bank and Nepal Bangladesh Bank (NBB) has hung in the balance after a rift surfaced in the settlement of human resources of these two entities after Nabil acquired NBB.

In less than a year, this is the second big merger/acquisition that has landed in peril. Earlier, a merger plan between Himalayan Bank and Nepal Investment Bank Limited failed due to the vested interests of the board of directors of the banks concerned.

Now, the acquisition of NBB by Nabil has become uncertain due to the issue of adjustment of their manpower after the acquisition. While NBB staff have been denying demotion after the two banks merge, Nabil Bank staffers have been considering it ‘unfair’ to get merged with equal status to that of NBB’s employees.

On January 13, 2022, Nabil Bank and NBB signed an agreement for the acquisition. Initially, the NBB Chief Executive Officer Gyanendra Prasad Dhungana, on behalf of the bank’s staff, had agreed for demotion of the NBB staff to merge with Nabil Bank.

But, dissatisfied with Dhungana’s decision, NBB employees took the issue to NRB — the sector’s regulator. The central bank, too, decided in favor of not demoting any NBB staff member after the acquisition.

Following the development, Nabil Bank staffers have launched a protest accusing NBB of randomly giving promotion to its staff to secure higher positions in the entity to be formed after the acquisition. Nepal Rastra Bank (NRB), in this regard, called on the board of directors and high level officials of both these banks on Wednesday, to talk over the issues.

After the uncertainty arose, Nabil Bank’s board now appears reluctant on appointing Dhungana, who had been agreed upon as the CEO of the merged entity from June-end, to the topmost position. However, Nabil Bank has recently appointed Sujit Kumar Shakya as the Acting CEO after the termination of the term of the former CEO Anil Keshari Shah.

In the first week of March, NRB had principally agreed on the acquisition of NBB by Nabil Bank. The swap ratio has been agreed to be fixed at 100 units shares of NBB equivalent to 43 units shares of Nabil Bank.