KATHMANDU, FEB 10 -
Consolidation is the buzzword in the domestic financial market. With merger still proving a hard nut to crack for banks and financial institutions (BFIs), some of them are now exploring other alternatives, including the joint-venture model. One of them is NIC Bank, which is currently working to bring in a foreign bank as joint-venture partner. NIC sources say they are exploring the joint-venture model and are in talks with three international banks, including an Indian. The bank, however, said this development was at the ‘very preliminary’ stages. “Discussions are in their preliminary stages and decisions on issues like stake and size of new entity are yet to be taken,” said an NIC official. “We are open to discussions regarding the stake.”NIC sources say if their pan materialises, the bank’s capital size will be increased.
The bank’s latest move has come at a time when the Nepal Rastra Bank (NRB) is mulling forcing BFIs having same promoters (single business group/family) to unify. In this connection, the central bank had held talks with NIC Bank and Bank of Asia Nepal for a possible amalgamation a month ago. The country’s two business houses—Triveni Group and Vishal Group—have stake in both the banks.
Acknowledging that the central bank had call on them, NIC official said this exploration had started much earlier. “In fact, our talk with the central bank was informal,” said official. “We have installed good corporate governance and our financial position is also pretty stable. Therefore, we were not forced to merge by the regulator.”
Promoters hold a 51 percent stake in the bank, while the general public has 49 percent. The bank, which started its operations in 1998, was the country’s first commercial bank to receive ISO 9001:2000 certification for its Quality Management System standards, and also the first bank to be provided a line of credit by the International Finance Corporation (IFC), an arm of the World Bank Group under its Global Trade Finance Programme.
Source: Kantipur
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