Wednesday 17th July 2024

Central bank to facilitate for big merger of BFIs

Published on : 27 July, 2020 6:03 pm

Nepal Rastra Bank (NRB) has announced its policy to further facilitate the banks and financial institutions (BFIs) for their acquisition and merger.

Issuing a new directive on Monday, the central bank has prioritized the concept of acquisition and merger of big banks and financial institutions meant for fiscal stability. In case of merger of ‘A’ class bank, the central bank has adopted the flexible policy in regard to the age of the Chief Executive Officer (CEO).

As per the current provision, a banker should not exceed the age of 65 years to lead the bank as the CEO. If the ‘A’ banks were merged together, there will be no age limit for the CEO.

The provision of age limit for the CEO will not be applicable for a single tenure after the beginning of the integrated transactions in case the banks were merged till the last day of the fiscal year 2077/078 BS. Likewise, the central bank has decided to exempt 0.50 percent in the cash deposit to be kept compulsorily after the banks’ merger and acquisition till the end of the FY 2078/079.

Likewise, the central bank has opted the policy of ‘forced merger’ of the BFIs with the crossholding in investment.

Similarly, the commercial banks with the commercial relations would be directed for their merger or acquisition, according to the new directive.

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