The two commercial banks announced a merger deal amid a ceremony held in Kathmandu on Wednesday. Infrastructure Development Bank Ltd, International Development Bank, Apex Development Bank Ltd and Supreme Development Bank have already signed similar merger pact with the NCC Bank.
The five banks signed an addendum to MoU on Wednesday after Kumari Bank also joined the amalgamation process.
Management Committee (Board) Coordinator of NCC Bank Laxmi Prapanna Niraula, Kumari Bank's Merger Committee Coordinator Shovakant Dhakal, and Iman Singh Lama, Bishnu Prasad Dhital, Madhav Prasad Bhattta and Chandra Prasad Bastola from Infrastructure, Apex, International and Supreme, respectively, signed the addendum to the MoU.
NCC Bank is currently under the reins of the Nepal Rastra Bank (NRB). The central bank had taken over the board of the bank one and half years ago after dispute between two promoter groups threatened financial health of the bank.
The merger decision has come in the wake of the recent central bank decision to hike the minimum paid-up capital of BFIs. According to new capital floor set by the central bank, a commercial bank should raise its minimum paid-up capital by four times to Rs 8 billion by mid-July 2017.
The central bank was looking for merging partner for NCC Bank even before the paid-up capital was raised, apparently to limit the feuding promoter groups into minority stake. If the current merger process goes as planned, the paid-up capital of the merged entity will reach Rs 8.21 billion.
The officials of the banks, however, say that they are yet to finalize the name of the merged entity and the swap ratio.
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