HIMALAYAN NEWS SERVICE
KATHMANDU: The High-level Financial Sector Coordination Committee meeting chaired by Finance Minister Barsha Man Pun today decided to start merger process of Rastriya Banijya Bank and NIDC.
The meeting also decided to seek opinion from Industry Ministry regarding the merger process. “The ministry has started the merge process of Rastriya Banijya Bank and NIDC,” a source at the ministry said.
Central bank has suggested merging two government-owned financial institutions almost a year ago as an alternative to capital injection in the Rastriya Banijya Bank that is the largest commercial bank in the country in terms of assets size, though it has negative net worth of Rs 10 billion.
The financial sector reform programme has brought about some structural changes in it, but failed in making it a financially healthy bank.
After the merger of the two, RBB — that has a paid up capital of Rs 385.30 million — can turn its negative net worth to positive by selling the assets of NIDC, according to the government plan.
The NIDC has land in Kathmandu, Pokhara, Biratnagar, Bharatpur, Mahendra Nagar, Surkhet and Dhangadi worth around Rs 10 billion, which will be enough for RBB’s turn over. Similarly, the NIDC that has a paid up capital of Rs 410 million has a positive net worth of around Rs 900 million by the end of the last fiscal year.