Kakrebihar Bikash Bank to Adopt Federal Structure

August 11: Kakrebihar Bikash Bank has announced of adopting federal structure. Kankrebihar Bikash Bank based in Surkhet has decided to adopt federal structure along with merger with three other banks and financial institutions (BFIs) after Nepal Rastra Bank's directive.

 The bank is merging with Kathmandu based Kasthamandap Development Bank, Butwal based Pashchimanchal Finance and Kanchanpur based Mahakali Development Bank.  Earlier, these BFIs had already conducted principle agreement for the merger. Kankrebihar Bikash Bank is merging with the BFIs in order to meet the minimum paid-up capital of Rs 2.5 billion for a national level development bank as per the NRB directive.

Previously, NRB initiated the merger policy in a bid to decrease the number of BFIs in Nepal. Merger is a mandatory provision for small institutions that lacks paid-up capital, have increasing operational risks and competition as well. “Discussion regarding the merger between the four BFIs is in final stage,” said Karna Bahadur Sijali, Executive Officer of the bank.  After the merger, the merged entity will start transaction in the name of Kasthamandap Development Bank with the paid up of Rs 2.8 billion.