The Ministry of Finance has formed a task-force to study the merger between Nepal Bank and Rastriya Banijya Bank.
The ministry said on Sunday that a task-force has been formed to study and analyze the merger of these two banks. Bhupal Baral, head of the Financial Sector Management and Corporation Coordination Division under the Finance Ministry has been assigned as the coordinator of the task force.
Earlier, the governor of Nepal Rastra Bank, Maha Prasad Adhikari, also suggested that it is necessary to go for merger with government banks as well.
Since the maximum paid-up capital of private sector banks has reached around 35 billion, of late, merger preparations have also started between government banks.
At the general meeting of the National Commercial Bank, he spoke publicly about the merger.
What is the financial condition of the bank?
Nepal Bank
The paid-up capital of Nepal Bank is 14.69 billion rupees. By the third quarter of the financial year, the bank has managed to collect deposits of 229 billion rupees and extended loans of 173 billion rupees.
By mid-April, the bank made a profit of 1 billion, 782 million, and 300 thousand rupees, while last year, the bank made a profit of 2.19 billion rupees. Compared to last year, the bank's profit has decreased due to the increase in bad loans and the increase in loan losses.
Currently, the bank's bad loans sand at 4.16 percent. As the profit has decreased, the distributable profit of the bank has also decreased. As of mid-April, the distributable profit of the bank has been limited to
180 million. During the same period last year, the bank's distributable profit was Rs 2.70 billion.
Rastriya Banijya Bank
In the third quarter of the current financial year, i.e., till mid-April, the bank has made a profit of 3.57 billion rupees. In the same period last year, the bank made a profit of 2.61 billion rupees. On the other hand, the bank's paid-up capital is 15.63 billion rupees.
By mid-April, the bank has collected Rs 302 billion in deposits and disbursed loans of 225 billion rupees. Bank's bad loans stand at 3.88 percent. Bad loans of banks have increased due to non-recovery of loans from banks and financial institutions.
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