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Merger and acquisition is the key to make the financial stability says governor Nepal

Photo: Balkrishna Thapa Chhetri

KATHMANDU: Nepal Central Bank, (NRB) Governor Dr.Chiranjibi Nepal on Monday has said that the merger and acquisition is the key to make the financial stability strong by strengthening financial institutions.
“The financial technology is becoming advanced and costly which increases cost of capital of banks and financial institutions. In this context, merger and acquisition would help adopt the advanced financial technologies and provide modern banking services to the people even in the rural areas,” he said while addressing the integrated transaction of Deva Bikas Bank following the acquisition of the Western Development Bank.
Stating that the government has a target to ensure financial access to the rural areas and increasing financial literacy campaign to the grassroots people, he urged the banks and financial institution to go in merger and acquisition to be strong and run the institutions smoothly.
He said that the problems among the banks and financial institutions would occur after the post-merger because there was different professional culture in different banks as almost all employees are taking banking training from only Nepal Banking Institute.
He said that the banks and financial institutes should win the confidence of the people as financial institutions become operation on the people’s trust.
“I urge the financial institutions to mobilize public property following the guidelines and direction of NRB as banks should be responsible to secure the public money. The NRB would take action if banks operated against the guidelines of NRB,” he said.
He asked the board members of the banks and financial institutions not to take banking business to earn large profits. If they want to make larger profits, they should engage in other businesses, he added.
Chairman of Security Board of Nepal Dr.RewatBahadurKarki suggested the banks to be aware to overcome the problems created after go either merger or acquisition.
“The management should equally treat all employees of the both institutions and decisions must be taken on the basis of consultation instead of power,” he said.
President of Development Bankers Association Govinda Prasad Dhakal said that the strengthing of the development banks was improving following the merger and acquisition.
Chairman of Board of Directors of Western Development Bank Om BhaktaBudathoki said that they had decided to go on acquisition to improve the financial strength of both institutions.
Board of Director of Deva Bikas Bank Jeevan Kumar Katwal said that his bank management was sincere to take a decision by holding discussion among the stakeholders of the bank.

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