The Nepali banking sector is likely to see fierce competition in the coming days. At a time when the market pie has not increased and over four dozen industries are lying closed across the country, the increase in number of financial institutions is leading to cut-throat competition in the domestic banking sector.
Apart from over a half dozen financial institutions - including B-class development banks and C-class finance companies - the entry of two 'big' A-class commercial banks will not only increase the number to 27 but also force them to search for new investment avenues.
The proposed Peoples' Bank Nepal Ltd - the 26th commercial bank - got the green signal on September 25. Similarly, the proposed Mero Bank Ltd - the 27th commercial bank - also recently got permission to operate after depositing five per cent of its proposed paid up capital to Nepal Rastra Bank, the central authority.
"Right after we get the operating licence, we'll start operations," said Dr Duman Thapa, coordinator of Mero Bank Ltd.With an authorised capital of Rs 4 billion and paid up capital of Rs 2.45 billion, the proposed Mero Bank Ltd has a total of 1,328 promoters.
"The promoters have 70 per cent share - that is, Rs 1.71 billion - and the rest 30 per cent share - Rs 730 million - will be floated among the public within one year of the bank beginning operations," Thapa added.
The bank that consists of five groups of promoters has industrialists, businessmen, social workers, Non-Resident Nepalis (NRNs), economists, diplomats, private school promoters, professors, doctors, lawyers, engineers and tourism entrepreneurs.A 13-member coordinating committee has been formed, with Dr Thapa as coordinator and Dr Govinda Nepal, Bhoj Bahadur Shah, Muktiram Pandey, Gopal Khadka, Gopal Khanal, Rameshwor Sapkota, Indra Bahadur Malla, Bijay Sambahamphe, Madan Acharya, Ishwor Gurung, Parmeshwor Panta, Sabhu Bikram Thapa and Tulsi Pokhrel as members.
Prof Dr Madan Kumar Dahal is chairman of the proposed bank that has - for the first time in the banking history of Nepal - an advisory council headed by former minister and diplomat Dr Bhesh Bahadur Thapa as its chairman.
People's Bank Nepal Ltd has a paid up capital of Rs 2 billion. "It is the first bank having Rs 2 billion paid up capital after the central bank increased the paid up capital limit for commercial banks," according to the bank.
The bank, with 898 promoters, has Guru Prasad Neupane as its chairman while Sailendra Guragain, Keshav Bahadur Rayamajhi, Dharmadhoj Parajuli, Nirmaljyoti Tuladhar and Chiranjeevi Dwa are its promoters. The bank is expected to come into operation by the second week of next April.
Licenced Commercial Banks
1. Nepal Bank Ltd (November 15, 1937)
2. Rastriya Banijya Bank (January 23, 1966)
3. Nabil Bank Ltd (July 16, 1984)
4. Nepal Investment Bank Ltd (February 27, 1986)
5. Standard Chartered Bank Nepal Ltd (January 24, 1986)
6. Himalayan Bank Ltd (January 18, 1993)
7. Nepal SBI Bank Ltd (July 7, 1993)
8. Nepal Bangladesh Bank Ltd (
9. Everest Bank Ltd (October 18, 1994)
10. Bank of Kathmandu Ltd (March 3, 1995)
11. Nepal Credit and Commerce Bank (October 14, 1996)
12. Lumbini Bank Ltd (July 17, 1998)
13. NIC Bank Ltd (July 21, 1998)
14. Kumari Bank Ltd (April 3, 2001)
15. Machhapuchhre Bank Ltd (October 3, 2000)
16. Laxmi Bank Ltd (April 3, 2002)
17. Siddhartha Bank Ltd (December 24, 2002)
18. Agriculture Development Bank Ltd (
19. Global Bank Ltd (January 2, 2007)
20. Citizens' International Bank Ltd (April 20, 2007)
21. Prime Commercial Bank (September 24, 2007)
22. Bank of Asia Nepal Ltd (October 12, 2007)
23. Sunrise Bank Ltd (October 12, 2007)
24. Development Credit Bank Ltd (Upgraded in 2007)
25. NMB Bank Ltd (Established in 1996/Upgraded in 2007)
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