NB and NCC banks call off merger process

September 24: Nepal Bangladesh Bank and Nepal Credit and Commerce Bank (NCC) have called off their merger process.

“The bank's investors and employees were also not interested to go for merger. We had put in lot of efforts to make the banks merge,” says Nepal Rastra Bank official.

The central bank wanted the two banks to merge to dilute the shares of NB Group, whose members have been accused of financial mismanagement. Now after the new NRB policy to increase the minimum paid-up capital to Rs 8 billion, the group’s stake in the two banks will automatically get diluted as the group will not be able to invest more in the banks.

At present paid-up capital of NCC bank is Rs.2.28 billion, and NB group has 30 percent share in the bank. But, with the issue of new directives by NRB, this figure will go down to 7.60 percent. Similarly, NB bank's paid up capital is Rs.2.43 billion; NB groups' stake there is 9 percent . When NB Bank raises its capital to Rs 8 billion, NB group’s stake will be limited to 2.73 percent.