Jyoti Group — a reputed business house of the country — is ready to take control of a commercial bank soon.
The group — that had merged its class 'C' financial institution Bhajuratna Finance with class 'B' Vibor Bikas Bank last year — today signed a memorandum of understanding for the merger process of Vibor Bikas Bank with Kist Bank.
"A merger committee including representatives of both the financial institutions will be formed soon," said chairman of Vibor Bikas Bank Dr Roop Jyoti. "The committee will appoint a reputed chartered accountant for the due diligence audit that will define the share swap ratio between the two institutions," he said, adding that the merged commercial bank will be a strong financial institution.
Kist Bank has a network of 51 branches, whereas Vibor has six. Likewise, Kist has a paid up capital of Rs 2 billion, while Vibor has a paid up capital of Rs 916.2 million.
The annual general meeting of Kist Bank had approved the merger of the bank, said managing director of Kist Bank Kamal Gnawali, promising that the merged entity will come into operations within the current fiscal year as both the financial institutions have many similarities in their operations.
Currently, Kist Bank's NPA stands at 7.15 per cent due to real estate lendings. "But the bank has reduced its real estate loans considerably," Gnawali claimed.
Likewise, Vibor Bikas Bank has also divested its property business and has improved its financial condition, informed its director Ajay Ghimire.