First Business News Portal in English from Nepal
KATHMANDU: The Nepal Investment Bank Limited (NIBL)-Himalayan Bank Limited (HBL) joint operation date has been deferred to October 1. Though the two institutions had initially planned to start joint operation from July 17, the plan has been deferred as different procedural works could not be completed on time due to Covid-19.
“Though we had planned to start joint operation from mid-July, we could not complete few things including internal and external audit on time due to the pandemic and other technical issues. However, we have now planned to operate jointly from October 1,” informed Ashoke Rana, chief executive officer of HBL.
As per him, the merger committee is sitting every week to address technical problems, discuss procedural works and execute the merger process as soon as possible. “Prior to starting joint transaction, both banks are busy preparing balance sheet of the current fiscal year and hold their respective AGMs as soon as possible. All decisions regarding the merger has to be passed through AGMs of both banks which will pave way for joint operation between the two institutions,” added Rana.
HBL and NIBL had inked merger agreement on May 13. Chairman of the HBL, Tulasi Prasad Gautam and NIBL Chairman Prithvi Bahadur Pandey inked the merger agreement at Aloft Hotel, Thamel. While Gautam and Pandey were present physically, other top level management staffs and promoters of these two banks had virtual presence in the merger agreement signing ceremony.
Following the agreement, 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 has already been 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.
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