Some 16 banks have pledged to undergo merger and acquisition (M&A) in the near future as asked by the central bank. However, they seeking tax incentives.
Century Commercial Bank, Citizens Bank International, Civil Bank, Global IME Bank, Himalayan Bank, Kumari Bank, Laxmi Bank, Machhapuchchhre Bank, Mega Bank, NCC Bank, NIC Asia Bank, Nepal Investment Bank, Nepal SBI Bank, NMB Bank, Sanima Bank and Sunrise Bank have informed the central bank that they are ready to either go for merger or acquire other banks, whereas Janata Bank and Global IME Bank have already announced their merger plans.
The central bank has – before the Monetary Policy for the next fiscal year 2019-20 – asked the banks to opt for either merger or the acquisition, on the basis of the government’s fiscal policy. The central bank had also sought commitments from all the 28 commercial banks – primarily intending to bring down the number of banks, raise their capital and increasing their lending capacity – for either merger or acquisition before the Monetary Policy is announced in mid-July.
Earlier, 4 years ago in the fiscal year 2015-16, the central bank had – through the Monetary Policy – compelled banks to raise minimum paid-up capital by four times to Rs 8 billion from Rs 2 billion.
The bankers are though ready to go for merger or acquisition; they have asked the government to reduce income tax levied on banks by at least five percentage points for a period of five years for those banks who choose to merge with others. Currently, the government imposes 30 per cent income tax in the banking sector.
Century Commercial Bank, Citizens Bank International, Civil Bank, Global IME Bank, Himalayan Bank, Kumari Bank, Laxmi Bank, Machhapuchchhre Bank, Mega Bank, NCC Bank, NIC Asia Bank, Nepal Investment Bank, Nepal SBI Bank, NMB Bank, Sanima Bank and Sunrise Bank have informed the central bank that they are ready to either go for merger or acquire other banks, whereas Janata Bank and Global IME Bank have already announced their merger plans.
The central bank has – before the Monetary Policy for the next fiscal year 2019-20 – asked the banks to opt for either merger or the acquisition, on the basis of the government’s fiscal policy. The central bank had also sought commitments from all the 28 commercial banks – primarily intending to bring down the number of banks, raise their capital and increasing their lending capacity – for either merger or acquisition before the Monetary Policy is announced in mid-July.
Earlier, 4 years ago in the fiscal year 2015-16, the central bank had – through the Monetary Policy – compelled banks to raise minimum paid-up capital by four times to Rs 8 billion from Rs 2 billion.
The bankers are though ready to go for merger or acquisition; they have asked the government to reduce income tax levied on banks by at least five percentage points for a period of five years for those banks who choose to merge with others. Currently, the government imposes 30 per cent income tax in the banking sector.
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