Machhapuchhre Bank Limited (MBL) and Standard Finance Limited started joint operation after merger from July 9. The merged entity — Machhapuchhre Bank Limited – has a paidup capital of Rs 2.47 billion and reserves of Rs 240 million. “We have framed a long term business strategy of the new entity,” said MBL Chairman Surya Bahadur KC. “We believe the merger is purely a business decision done with an aim to grow and become one of the best financial institutions.” Before the merger, the capital adequacy ratio (CAR) of MBL was near the regulatory requirement of 10 per cent. “It was hurting us because we were unable to do good business despite ample opportunities,” said Apachh Kumar Yadav AGM of MBL. “On the other hand, Standard Finance’s CAR was pretty high, making the fund idle.”


Therefore, according to officials, the amalgamation will complement each other. Following the central bank’s refusal to entertain Standard’s application for upgradation into a commercial bank, its funds had remained idle. After the merger, the number of branches of the new entity will increase to 54. “There will be duplication of branches in five places,” said Standard CEO Umesh Singh Bhandari. “We are planning to relocate these branches.”


The officials also said the human resource is being handled carefully. All employees will have a place in the merged entity,” said Bhandari. According to him, the merger has increased the competitive ability of the bank. The bank will soon resume its operations in the rural sectors deprived of banking facilities, he added.


The speaker of Nepal Rastra Bank, Bhaskar Mani Gyawali has considered mergers between Nepali BFIs as a positive aspect. According to him, almost all the BFIs are eyeing merger as it leads towards strengthened paid up capital. Currently, 12 BFIs are on the verge to get merger approval from NRB. On the other hand, 12 more BFIs have submitted their merger proposals.