NRB’s 12 questions to CEOs & promoter of banks regarding its merger policy

June 11, 2021, 04:22:58 PM |

KATHMANDU: The Nepal Rastra Bank (NRB), which is formulating monetary policy for next fiscal year with top priority to big mergers between banks and financial institutions (BFIS), has asked several questions related to mergers to chief executive officers (CEOs) and promoters of banks.

The Economic Research Department of NRB has sent a survey questionnaires to the chairpersons, directors, CEOs, deputy CEOs and others of banks and finance companies regarding merger, its modalities, pros and cons ahead of the Monetary Policy.

There has been a long-running debate over the number of banks and finance companies in Nepal. It has been a decade since the central bank adopted a merger and acquisition policy to reduce the number while a large number of development banks and finance companies have merged as well.

However, so far no study has been done by any body on how many banks should there be in Nepal. For the first time, the NRB has started a survey on maximum number of banks and finance companies required in Nepal.

The NRB has basically asked 12 questions to CEOs and promoters in the survey for merger and has given multiple answering options on each questions. Below are the questions asked to CEOs and promoters of BFIs by NRB:

Is your organization in the process of merger and acquisition?
How has your organization improved since the merger?
What model do you think is needed to allow BFIs to operate in Nepal?
Do you think the number of BFIs in Nepal is more than required?
If the number of banks and financial institutions seems to be high, what is the appropriate modality to reduce their number?
What kind of merger model do you think would be appropriate in Nepal?
To what number should commercial banks in Nepal be limited?
What are the positive aspects of the merger and acquisition policy taken by NRB?
Do you see the negative aspects of the merger and acquisition policy taken by NRB?
What are the positive aspects of a large bank?
What are the downsides of having large number of banks?
What further improvements do you think NRB needs to make to expand financial access and strengthen the financial sector?