KATHMANDU: Against rumours that Nepal Rastra Bank will adopt a policy of ‘forced merger’ between banks and financial institutions, the central bank has made merger between banks optional through the Monetary Policy for 2019-20, which was unveiled on Wednesday.
However, NRB has announced a package of incentives to banks going for merger.
Provided that banks merge and start a unified transaction by mid-July 2020, the deadline for such banks to float the required loans in the agriculture, energy and tourism sectors have been extended till mid-July 2021. Similarly, the merged bank will also get up to mid-July 2021 to reach the 4.4 per cent spread rate.
Along with this, the NRB has said that merged banks will not have to take approval of the central bank to expand their branches across the country.
Similarly, the cooling period of six months for board of directors of merged banks and their chief executive officer and deputy CEOs will not be applied, according to the central bank.
While banks that do not go for merger will have to issue debenture worth 25 per cent of core capital within this fiscal year, banks that opt for merger will get up to mid-July 2021 to implement the provision.
The post Merger ‘optional’ for banks; NRB announces incentive packages appeared first on The Himalayan Times.
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