By A Staff Reporter
Kathmandu, Dec. 6: The Global IME Bank Friday began its integrated transaction after its merger with the Janata Bank Nepal Limited.
Finance Minister Dr. Yuba Raj Khatiwada inaugurated the joint transaction of the company at a programme organised in the corporate office of the Global IME Bank here.
Minister Khatiwada said that the integration of the both commercial banks would create more powerful institution which would leave a positive impact on the national economy as it could invest in mega projects.
“A powerful company can invest in medium and long-term projects and expand its branch network across the country which will facilitate the people with easy and accessible financial services,” he said.
Minister Dr. Khatiwada urged other banks and financial institutions to go for merger to make the institution stronger, more capable and competitive.
"The banks should focus on investing in infrastructure, which is essential to make the country prosperous. It is not possible to achieve higher economic growth only through short-term investment. It is an opportunity for the big financial institutions to invest in infrastructure projects as the country is looking for mid-term and long terms investment," he said.
It will be easier to take foreign loans and invest in the infrastructure projects for big institution like this bank, he said.
"Operation cost of the institution will decrease if we create bigger institution by merging two institutions and this will help minimise the interest rate. When the interest rate goes down, the demand of loan will increase," he said.
He further said that the availability of loanable fund was also growing in the banking sector as the government had dedicated to increase the government expenditure and had plans to keep 50 per cent budget of the local bodies at the BFIs.
Governor of Nepal Rastra Bank Dr. Chiranjibi Nepal said that the issue of information technology was becoming challenge in the banking sector.
He asked the BFIs to invest in IT sector for secure banking transaction as the BFIs were not able to invest adequately in the sector.
The merger and acquisition policy of the NRB would help increase investment in IT, he said, adding that the NRB would give continuity to the merger and acquisition process to maintain stability in the financial sector.
He also directed the BFIs to make the employees more professional by providing them with training, as the banking crimes were growing with the involvement of the bank employees themselves.
Chairman of Global IME Bank Limited Chandra Prasad Dhakal said that the bank would focus on providing modern banking services to the people reaching the people’s doorsteps in the days to come.
Stating that the Global IME Bank has a long experience of merger and acquisition, he said that management of the bank after the merge would be sound and capable to maintain good governance.
He said that the bank had become the biggest financial institution in terms of capital, branches and volume of business.
After the acquisition of Janata Bank Nepal, the paid up capital of Global IME Bank has reached Rs. 19 billion.
Similarly, the branch network will reach 300 plus at all seven States and provide services through more than 840 extension counters. The deposit of the banks reached Rs. 213 billion and loan Rs. 194 billion.
Chairman of Janata Bank Nepal Keshab Bahadur Rayamajhi said that they had decided to go for merger to make the institution strong, capable and competitive in the banking sector.
Senior vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Shekhar Golchha said that the banks and financial sector should provide loan for the business at lower interest rate.
He said that the merger and acquisition supported the BFIs to strengthen their capacity, adding that the BFIs should invest in mega infrastructure sector.
Officiating president of Confederation of Industry Bishnu Agrawal and President of Nepal Chamber of Commerce Rajesh Kazi Shrestha suggested the banks to increase their investment in productive and export sectors.
President of Nepal Bankers’ Association Gyanendra Dhungana said that it was the biggest merger of commercial banks and had sent a positive message to the BFIs that they should also go for merger.