KATHMANDU: The Nepal Rastra Bank (NRB) has principally agreed the merger between Himalayan Bank and Nepal Investment Bank.
A meeting of the Board of Directors of NRB, held on Monday, gave in-principle agreement to merge Himalayan and Nepal Investment Bank.
The two banks had inked merger agreement on May 13. Following the agreement, the two banks have decided to complete all merger processes within next two months and start integrated transaction from beginning of the next fiscal year, possibly from July 16 itself.
Similarly, both the institutions have formally informed the Nepal Rastra Bank (NRB), Nepal Stock Exchange (Nepse), Office of the Company Registrar and Securities Board of Nepal (Sebon) about the merger agreement. With this, shares of both the institutions will be suspended until the integrated transaction is completed.
The merged entity will be named as Himalayan and Nepal Investment Bank and will be the largest commercial bank in Nepal with almost Rs 25 billion paid-up capital. AT present Global IME bank is the largest commercial bank in Nepal in terms of various indicators.
Following this mega merger agreement, Ashok Rana of Himalayan will be the chief executive officer (CEO) of the new institution while Jyoti Pandey of NIBL will be the deputy CEO with some designated special authority. Meanwhile, Prithvi Bahadur Pandey of NIBL will be the chairman of the merged entity while remaining promoters will be selected based on the share structure.
Rastriya Beema Samiti, Mahalaxmi Investment and Chhaya Investment, among others are the major investors in NIBL while Habib Bank (Pakistan), Employees Provident Fund (EPF) and Aabha International, among others are top investors in HBL.
The merged entity will follow Staff Regulation and Laws of Himalayan Bank. This means that employees of NIBL will have their salaries increased. Currently, NIBL has almost 1,500 staffs while HBL has some 1,000 staffs.
The merger agreement also states that the merged entity will introduce voluntary retirement scheme to downsize staffs later but will not forcefully downsize staffs.
The swap ratio is estimated to be around 1:1 as agreed by both NIBL and HBL.