Due to differences over how to move ahead in the post merger scenario Kist Bank and Vibor Bikas Bank today decided to call it a quit after eight months of signing Memorandum of Understanding (MoU).
The confusion started after the exit in June of the then managing director of Kist Bank Kamal Gnawali – over the embezzlement – who was supposed to be the chief executive of the merged entity.
"The merger process was sailing smoothly aiming at concluding it within the last fiscal year till June," a source at the merger committee that has three representatives from Kist and two from Vibor.
A meeting of the merger committee today decided to table the decision not to move ahead with merger process at their respective financial institutions to officially close the merger chapter between them.
Kist and Jyoti Group's Vibor had signed the MoU on March 21. But they have not yet completed due diligence audit (DDA) that would help fix the share swap ratio. They have also failed to reduce their non-performing loans (NPLs) below five per cent within three months as they have agreed during the agreement.
The delay has made the shareholders of both the financial institutions impatient as they have not been able to sell their shares. Nepal Stock Exchange (Nepse) has suspended the trading of the shares of both the financial institutions after they started merger process.