Published On: January 16, 2022 06:55 PM NPT By: Republica | @RepublicaNepal
KATHMANDU, Jan 16: Nepal Rastra Bank (NRB) is mulling over taking action against Himalayan Bank Limited (HBL) and Nepal Investment Bank Limited (NIBL), which have failed to conclude their merger plan despite signing officially an agreement for unification.
The two banks have backed off from their eight month old plan to go into merger after the 29th annual general meeting (AGM) of HBL held on Friday could not endorse the plan of merger with NIBL. Of the total shareholders, only 43.63 percent voted for the merger, 42.29 percent voted against the merger while the remaining 14.09 percent shareholders did not participate in the voting.
In this regard, NIBL has also annulled its special AGM scheduled for January 18. The bank was supposed to put forth the merger with HBL as the main agenda at Tuesday's AGM.
According to an official of NRB, the central bank is yet to receive the official letter regarding the demerger of the two entities. As per NRB’s Merger Bylaw 2011, either these banks need to find other partners to merge with or they face action from the central bank.
For failing to go into unification despite signing a Memorandum of Understating (MoU) for the same, these banks could be barred from distributing dividends to their shareholders. Similarly, they may be prevented from opening new branches, face restriction on transaction of shares in the secondary market, deprived of receiving a number of facilities from the regulator or the operators concerned could face a caution note from the regulator, said the NRB official.
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