Global IME Bank launches 3D secure services to make online transactions more secure

Global IME Bank from today launched 3D secure services for its credit cardholders to perform online transactions and now part of initial few banks that offer such services in Nepal.
"The service allows Global IME Bank credit card holders to use their cards during online transactions and allow them to participate in verified by visa process," the bank said, adding that the new value-added service by Global IME Bank is an extension of the banks mission to reiterate its commitment to its consumers to meet the needs of an ever-changing market in terms of security, technology, and financial solutions. "The few simple steps will enable cardholders to activate the new feature while performing first ecommerce transaction where customers need to enroll and set credentials for future usage."
Subsequent online purchases will then be validated with additional layer of security for cardholder’s authentication, said the Global IME Bank that has in association with visa partnered with Izealiant Technologies for implementing the solution that provides flexibility to choose authentication types like password or OTP depending upon customer preference.
As a direct benefit, Global IME Bank cardholders can now enjoy additional security for their online card usage on various ecommerce sites worldwide, it claimed. "It will also increase acceptance across more merchants participating in 3D secure services for using Global IME cards."
The protective feature enables the bank to authenticate not only the card but also the cardholder during payment of internet purchases thus protecting their online transactions against theft and illegal use of cards, it added.
Acting chief executive of the Global IME Bank Janak Sharma Poudyal said that the bank's new 3D Secure Services for card holders plays a significant role as it enhances security which is a critical aspect of any online business transaction. "This along with our impressive card features ensures that we always meet the evolving security needs of our customers to give them a world class banking experience," he added. 

Global IME Bank gets fifth partner Gulmi Bikas Bank to merge with

Global IME Bank is planning another merger with Gulmi Bikas Bank.
The class ‘A’ financial institution signed a memorandum of understanding (MoU) with class 'B' Gulmi Bikas Bank today after their initial understanding two weeks back.

Formed after the merger of Global Bank, IME Financial Institution and Lord Buddha Finance, the Global IME Bank has been currently in an acquition process with Social Development Bank too. Gulmi Bikas Bank will be the fifth entity is has been acquiring. Though the central bank has not brought Acquisition law, the banks and financial institutions have been following the Merger law for acquisition too.

Global IME Bank that has a paid up capital of Rs 2.25 billion will increase its paid up capital to Rs 2.50 billion after the merger with Gulmi Bikas Bank, excluding Social Development Bank that has a paid up capital of Rs 25 million.

Gulmi Bikas Bank with its listed 250,000 units of ordinary shares at Nepse was trading at Rs 141 per unit share before being suspended for the time being due to the merger process.

Government to help open liaison office abroad: PM

The government will help domestic banks open their liaison office abroad as it will help them bring in the remittance through formal channel.
However, the banks should provide loans to productive sector from the remittance inflow, said caretaker Prime Minister Dr Baburam Bhattarai inaugurating Global IME Bank here today.
The remittance inflow into the country has been encouraging but it has to be utlised in the productive sector, he said, adding that the merger among the banks and financial institutions will help provide enough capital at the transition period, when the country is moving towards capitalist industrial economy from the traditional agriculture.
Without economic development and prosperity, the democracy cannot sustain for a long time, the caretaker premier said. "And development is not possible without private sector. Similarly, without investment infrastructure development is not possible."
However, current trend of politics on poor people will be short lived and instead the political parties must do politics based on development, he suggested.
"The increased number of banks and financial institutions in a small economy like Nepal has channeled investment towards unproductive sectors due to rising and unhealthy competition," said caretaker finance minister Barshaman Pun.
The more the number of banks and financial institutions, the harder it is for the regulator to regulate them," he said, adding that the banks and financial institutions have also urban-centric due to pressure.
Merger is also key to generate big capital base and invest on big infrastructure projects, said central bank governor Dr Yubraj Khatiwada on the occasion.
"To solve the current problem of assets-liability mis-match that has hit the banks and financial institutions lately, the government has asked the multilateral donors to float local current bonds, he informed, adding that it will help banks and financial institutions to invest on long-term infrastructure projects.

Global IME Bank operational
KATHMANDU: Global Bank, IME Financial Institution and Lord Buddha Finance merged to become the Global IME Bank that started its operation from Monday. "Global IME Bank Ltd has become the biggest merger in banking history by completing merger process within short span of time," according to the banks chairman Chandra Prasad Dhakal. Global IME Bank has 62 branches, two extension counters and 57 ATMs network throughout the country, he said, adding that it is the seventh bank in Nepal to issue Visa Credit Card. After the merger, Global IME Bank has made its presence in 13 zones of Nepal and is confident to extend its service network through the country, Dhakal added. "It has a total paid up capital of Rs 2.18 billion with a deposit base of Rs 26 billion, loans worth Rs 20 billion and more than 255,000 customers.

 

Former king’s move will help political parties forge consensus: PM

The current 'move' of the former king Ganendra Shah will help forge consensus among the political parties despite their differences, according to the caretaker Prime Minister Dr Baburam Bhattarai.
Thanking the former king for his coup on February 14, 2005 that helped forge the consensus among the political parties, the premier inaugurating the Global IME Bank here today said that the the former king should understand that his such move will only help political parties to reunite like in 2005.
Bhattarai also warned former king of stripping all the state facilities. "The political parties will have to rethink on his state facilities, if he tries to act smart," he said, adding that as the head of the government, he will take the lead to do so.
"The resurrection of monarchy is impossible as the wheels of time could not be turned back," Bhattarai said.
The former king had in his televised interview yesterday questioned the ability of the political parties in delivering the public what they had promised.
"We might have failed to deliver but there is no difference among the political parties that the country should remain republic and any act against it will not be tolerable," according to the caretaker prime minister, who has declared election on November 22, due to May 27 death of Constituent Assembly that failed to promulgate Constitution even after four years.
The former king had in the interview floated the idea of comeback as a guardian. "It seems former king has not yet learnt lesson,” he said.

NIC Bank, Bank of Asia Nepal to merge

The domestic financial sector will witness a merger between two commercial banks for the first time with the merger of NIC Bank and Bank of Asia Nepal (BoAN).
NIC Bank and BoAN signed a memorandum of understanding today for the proposd merger which is expected to be concluded by mid-January 2013. "Both the banks had been looking for a partner to merge with in both international and domestic banks but talks did not lead anywhere," said chief executive of NIC Bank Sashin Joshi.
He stressed that after the merger, the merged entity will be one of the largest commercial banks with the highest capital base exceeding Rs 5 billion. "This is first time that any two strong class 'A' financial institutions are going to merge, and the increased capital base will allow the bank to finance large projects on its own," he added.
The banks will apply for a Letter of Intent (LoI) at Nepal Rastra Bank (NRB) and after obtaining the LoI they will conduct Due Diligence Audit that will determine the share swap ratio between the banks.
The banks have yet to decide on the name after the merger. After the merger, the bank will have 65 branches and 69 ATMs with 36 branches of NIC and 37 branches of BoAN in operation.
Likewise, its customer base will exceed 225,000 with total deposits of Rs 34 billion and loans worth Rs 28 billion. "The merged bank will have about 90,000 shareholders and 800 employees," according to Joshi. "The bank will strive to retain all its employees as the expansion of the bank will require more manpower," he added.
The banks have already corresponded with Nepal Stock Exchange to halt trading to avoid any manipulation of share prices. NIC's shares were traded at Rs 486 and BoAN shares were traded at Rs 237 at the stock exchange today. BoAN earned a profit of Rs 117 million and NIC earned Rs 263 million by the third quarter of the current fiscal year.
Since the last couple of years, NRB has been encouraging financial institutions to consolidate as the Nepali financial system is not large enough to allow space for more than 200 financial institutions to conduct business without stepping on each other's toes. Due to the central bank's insistence on mergers, there are more than 26 financial institutions that have formally applied for an approval to merge from NRB.
The central bank has already given LoI to eight sets of financial institutions with six more to go. Most of the financial institutions seeking mergers belong to class 'C' and 'B' categories. Among the commercial banks, Machchhapuchhre Bank is opting for a merger with Standard Finance, and Global Bank's merger with IME Financial Institution and Lord Buddha Finance is almost complete.

Global IME Bank to start soon
KATHMANDU: The merged entity of Global Bank, IME Financial Institution and Lord Buddha Finance will start operations as Global IME Bank from July 9, according to the bank. After the merger, the bank will have a paid-up capital of around Rs 2.20 billion and will be able to fulfill the central bank's regulation. The merger was granted final approval last week. The bank and IME Financial Institution being promoted by IME Group was asked by the central bank to opt for a merger as it will be easier and send a positive message in the market.

Central bank enforces PCA on financial institutions

The central bank has enforced prompt corrective actions (PCA) on Himalayan Finance and Arun Finance and sought explanation from Crystal Finance and Kuber Merchant Bank and Finance.
The management decision has enforced the PCA on them as they failed to maintain capital adequacy. Once the PCA is imposed, the banks and finance companies cannot mobilise deposits, open branches, distribute dividends and increase salaries and incentives of employees and add new employees that could add expenses.
The three class C finance companies have only not been able to maintain capital adequacy ratio but were suffering from bad corporate governance that attracted the central bank's move, according to the central bank sources.
The Nepal Rastra Bank regulation states that a class ‘C’ financial institutions must maintain 11 per cent capital adequacy ratio that is a measure of the amount of a bank’s core capital expressed as a percentage of its risk-weighted asset.
Earlier, the central bank has asked clarification from the finance companies  but their answer were found unsatisfactory forcing the central bank to enforce PCA.
Similarly, Crystal Finance and Kuber Merchant Bank and Finance have been asked to clarify why they have not been able to maintain capital adequacy and good corporate governance. After their reply, the central bank will impose PCA on them too, according to the central bank officials.
Meanwhile, the central bank board meeting today approved the merger between Global Bank, IME Financial Institution and Lord Buddha Finance.
On Monday, the special general meeting of Global Bank and IME Financial Institution has decided on the share price swap ratio of each financial institution for merger.
The special meeting — of the class ‘A’ commercial bank and class ‘C’ finance company under the same group — had approved the decision of the financial institutions to swap 100 unit shares of IME Financial Institution for 105 unit shares of Global Bank based on net worth calculated during Due Diligence Audit.
Global has a paid up capital of Rs 1.6 billion and a deposit base of Rs 18.9 billion and has floated loans worth Rs 15.2 billion. The bank’s listed stock in the share market exceeds 15 million units with market capitalisation worth Rs 2.4 billion. The bank’s stocks were last traded in February at Rs 160 per unit before it formally took up the merger procedure.
Likewise, IME provides banking services to more than 111,000 customers through 26 branches across Nepal. The finance company’s shares were last traded at Rs 201 in February. It has more than 3.6 million unit shares listed at Nepse with market capitalisation of Rs 723 million.
IME has a record of distributing dividends annually without fail. Following the merger, the combined paid up capital of the merged entity will be more than Rs 2 billion and will be able to fulfill Nepal Rastra Bank (NRB)’s regulation.
Similarly, Lord Buddha Finance had also applied or merger with Global Bank and IME Financial Institute. Similarly, Pashupati Bikas Bank and Uddhayam Biaks Bank also got LOI for merger.

Kist dominates share trading

Kist Merchant Banking and Finance -- recently upgraded to the country's 26th commercial bank -- pushed Global Bank to second position this week while dominating Nepse in terms of share units traded and trading amount with 79,000-unit shares of it changing hands in Rs 24.91 million. However, in terms of number of transactions Global Bank continued to top the chart with 705 transactions.
Kist Merchant Banking and Finance (with Rs 24.91 million), Global Bank (with Rs 24.88 million), Nepal SBI Bank (with Rs 21.35 million), Standard Chartered Bank Nepal (with Rs 19.85 million) and Sanima Bikas Bank (with Rs 19.40 million) were the top performers of this week.Of the nine-sub groups' indices, two -- hotels and trading sub-groups -- did not witness any changes in their indices as their shares were not traded. Similarly, two sub-groups -- manufacturing and others -- gained by 4.93 points to reach 438.21 points and 5.87 points to reach 605.08 points, respectively. The others sub-group gained because of Nepal Telecom as the company is distributing 25 per cent cash dividends from this week.
The other five sub-groups lost due to low investor confidence though the transaction amount increased by 8.37 per cent to rise to Rs 236.55 million against last week's transaction, according to Nepse.
The finance companies sub-group plunged by 23.45 points to dip to 732.75 points while hydropower companies' sub-group lost 16.73 points to drop to 843.63 points. Similarly, insurance companies sub-group shed 14.71 points to drop to 636.88 points and commercial banks sub-group faltered by 12.82 points to drop to 649.56 points. The development banks sub-group slipped by 7.10 points to drop to 821.93 points.
The major sub-groups' plunge dragged Nepse down by 9.24 points to close weekly trading at 647.78 points from last week's closing of 657.02 points.The 78-scrip sensitive index -- considered blue chip shares in the domestic market -- also lost 3.77 points to drop to 172.24 points from last week's closing of 176.01 points. Similarly, the float index -- calculated on the basis of real transactions -- also lost 1.18 points to close at 63.21 points from last week's closing of 64.39 points.
The week started in the red on Sunday as Nepse shed 7.98 points to drop to 649.04 from last week's closing of 657.02 points. Monday witnessed a further drop by 8.88 points but Tuesday onwards Nepse tried to rebound with a gain of 1.48 points to 641.64 points on Tuesday. The gaining trend continued on Wednesday and Thursday to close the weekly trading at 647.78 points.
The sole secondary market's five-day trading saw 1,26,983-unit of bonus shares of Birgunj Finance being listed.

This week too, Global Bank rules Nepse roost

Global Bank dominated in Nepse the second consecutive week as it topped the chart in terms of share units traded, trading amount and number of transactions with 42,000-unit shares through 663 transactions at Rs 25.29 million.
However, the major sub-groups plunged to drag Nepse down by 5.69 points to close weekly trading at 657.02 points from last week's closing of 662.71 points. Of the nine-sub groups' indices, only one sub-group -- hotels -- rose to a marginal 1.45 points to reach 363.11 points from last week's closing of 361.66 points.
The other seven sub-groups -- except trading that remained constant due to no transaction of its shares -- lost due to low investors confidence though the transaction amount increased by 73.75 per cent to rise to Rs 218.2 million against last week's transaction of Rs 123.5 million, according to Nepse.
The 78-scrip sensitive index -- considered blue chip shares in the domestic market -- also lost 0.65 point to drop to 176.01 points from last week's closing of 176.66 points. The float index -- calculated on the basis of real transactions -- also lost 0.32 point to dip to 64.39 points from last week's closing of 64.71 points.This week witnessed five-day trading as against last week's three-day trading, but Nepse gained only on one day.
The week started in the red as on Sunday Nepse shed 2.76 points to drop to 659.95 points from last week's closing of 662.71 points. However, Monday witnessed a marginal gain of 0.06 points to raise it to 660.01 points. Nepse continued to lose on the remaining days -- Tuesday, Wednesday and Thursday -- and closed weekly trading at 657.02 points.
This week's top performers were Global Bank (with Rs 25.29 million), Standard Chartered Bank Nepal (with Rs 21.93 million), Bank of Kathmandu (with Rs 16.86 million), Nepal Development and Employment Promotion Bank (with Rs 10.96 million) and Gurkha Development Bank (with Rs 10.15 million).
The development banks' sub-group shed 13.48 points and dropped to 829.03 points whereas commercial banks' sub-group lost only 2.34 points and dropped to 662.38 points. The finance companies' sub-group lost 5.15 points and dropped to 756.20 points and the insurance companies' sub-group fell by 5.88 points to 651.59 points.
The manufacturing sub-group went down by 0.77 point to 433.28 points and the hydropower sub-group downed by 4.09 points to 860.36 points. The highest loser was the others' sub-group that went down by 18.79 points to 599.21 points.
The sole secondary market this week also listed over one million-unit of bonus and rights shares of six financial institutions.

Brokers' exam guide
KATHMANDU: Securities Research Centre and Services (SRCS) has brought out a book -- Share Broker Licence liney ke garnu parchha (How can one get share broker's licence) in the market.
The publication of the book might be called ill-timed as Nepal Stock Exchange (Nepse) is still in legal consultation due to confusion over the brokers' exam. However, the book is useful as the SRCS has compiled all the regulations, the procedure of brokers' selection and model questions for the exam.
For a long time -- almost two decades -- Nepse ruled the capital market as the sole secondary market. Now, however, the increasing number of listed companies and investors but few brokers have marred the growth of the capital market.
The market size has increased seven-fold and the number of investors has crossed 1.5 million but the number of brokers has dropped to 23 from the initial 32. More brokers will not only make the it easy for investors' share trading but also create jobs as one broker has to have atleast five employees.
"The number of brokers can be increased but there is a legal hurdle," said Shankar Man Singh, managing director of Nepse. The CIAA has directed Nepse to halt the process of adding new brokers whereas the Supreme Court has given the go-ahead. "The contradictory decision of the two institutions has created confusion," he said adding that Nepse is consultating lawers for a way out.
If Nepse decides to enlist more brokers, the book could well become a hot potato.

Global Bank dominates Nepse

Global Bank dominated the Nepse this week as it topped the chart in terms of share units traded, trading amount and number of transactions with 29,000-unit shares through 423 transactions at Rs 17.28 million.
Experts, however, suspected matching that has fueled the performance of Global Bank this week. This is the second week the bank's shares started trading in the secondary market.
"Share matching -- a process of transferring shares to one's name from other's in mutual consent -- might be the reason behind the latest entrant Global Bank's performance," suspected Rabindra Bhattarai, a share analyst.
Though some brokers claim that matching is not possible in the automated system others believe its still in practice in some way or other.
Of the nine-sub groups' indices, the four sub-groups -- commercial banks, hotels, others and manufacturing -- surged to push the Nepse up, albeit marginally, but the equal number of sub-groups -- development banks, finance companies, insurance companies and hydropower -- lost whereas only one -- trading -- sub-group remained constant as it did not see any transaction this week.
The other sub-group gained 7.04 points -- the highest for the week -- to 618.00 points, whereas the manufacturing sub-group came second with 6.27 points gain to 434.05 points. The commercial banks sub-group gained 3.86 points to 664.72 points and hotels sub-group gained 2.17 points to 361.66 points.
However, development banks sub-group's index plunged by 15.31 points to 842.51 points and hydropower sub-group shed 11.05 points to 864.45 points. Similarly, the insurance companies sub-group lost 4.08 points to 657.47 points and finance companies sub-group lost 1.97 points to 761.35 points.
This week's top performers were Global Bank (with Rs 17.28 million), Standard Chartered Bank Nepal (with Rs 8.99 million), Gurkha Development Bank (with Rs 8.56 million), Bank of Kathmandu (with Rs 7.33 million) and Nabil Bank (with Rs 5.21 million).
This week witnessed only three-day trading -- due to a public holiday on Tuesday of Nepali New Year and a day of strike by Nepse's employees halting trading -- unlike its regular five-day trading last week.
The week started in red as on Sunday, the Nepse shed 0.21 point to 660.15 points from the morning's opening of 660.36 points. However, Monday witnessed a gain of 1.12 points to 661.27 points. Nepse continued to gain on the last day of the trading for this week with 1. 44 points to close the market at 662.71 points.
The major players surge pushed the Nepse this week by 2.35 points to close at 662.71 points from the Sunday's opening of 660.36 points.
Similarly, the 78-scrip sensitive index -- considered the blue chip shares in the domestic market -- also gained 0.82 point to 176.66 points from Sunday's opening of 175.85 points. The float index -- calculated on the basis of real transactions -- gained 0.19 point to 64.71 points from the Sunday's opening of 64.52 points.
However, the total transaction amount for this week decreased to Rs 123.5 million from last week's transaction of Rs 188.68 million. The contribution of Group-A companies also dropped to 53.69 per cent against last week's 63.07 per cent.

Rates looks up

The days of low interest rates are soon going to be things of past as some of the banks have started increasing their interest rates.
Though the interest rates offered by some of the leading banks is as low as two per cent, cut-throat competition between the banks has forced them to hike interest rates.
"The older banks continue to give low interest rates between two and three per cent," Kishore Maharjan, CEO of Sunrise Bank Ltd said, adding that the new banks are giving better rates.
"Sunrise Bank offers the highest rate on the savings deposit at 6.5 per cent that exceeds the inflation rate of six per cent," he adds.
The latest entrants in the banking sector like Global Bank, Citizen International Bank and Prime Bank come next in terms of offering comparatively high interest rates at present.
"Banks increase interest rates on lending to compensate for increased interest rates on deposits. Interest rates on deposits jumped substantially due to liquidity crunch, result of capital flight and absorption of fund by the government," Maharjan said.
Small accountholders will largely benefit, if increasing of interest rates will be a successful mantra for Nepali banks in the days ahead.
Since there are few deposit strong corporate institutions, they had field day hiking up their interest rate as high as 8.5 per cent for one year fixed deposit.
Spread is also higher in Nepal because of low deposit rates. "The lending rates of Nepali banks are much lower in comparison to India or Pakistan," he added.
"Because of several repos and selling of over $24 million has solved the liquidity crunch temporarily," Maharjan said, adding that when government absorbs both ADBN and NT’s share money next month, there could be some crunch again.
The share money of NT’s share is in the banking system unlike the ADBN’s share money that is blocked at a place.
Customers can open an account at very low balance or even at zero balance also, at present. A customer can open an account at Sunrise with Rs 1,000. Sunrise Bank is also providing accident and disability insurance services for free.

Commercial banks pay small investors negligible rate

Commercial banks pay small depositors negligible interest on their hard-earned savings — almost half of what they offer the institutional depositors. While small depositors are offered two to three per cent interest rates, the big institutional depositors get more than five per cent.
Interest rate disparity is due to central bank's deregulation. blame some bankers. Krishna Bahadur Manandhar, acting governor of Nepal Rastra Bank said that liquidity crunch is causing disparity not the deregulation.
"When there will be no liquidity crunch, the banks will automatically offer more interest rates to the small depositors also," he added.
Suman Neupane, chief executive officer (CEO) of Global Bank said that his bank is not discriminating between the small depositors and corporate depositors. "We offer four per cent interest for the small depositors in the normal savings, whereas the corporate depositors gets 5.5 per cent," he said.
Anil Shah, CEO of Nabil Bank also agreed that there is interest rate disparity. "But the depositors can choose as there are more banks and they offer different interest," he said, adding that the present disparity is due to need of banks and liquidity crunch.
"Its not discrimination rather need of the banks," he said.
However, the disparity in interest rates is blamed for the capital flight in recent days.
If the rising inter-bank lending rate that is hovering over eight per cent up from 3.5 per cent in mid-July is any indication, the small depositors should also get more interest rate, said one banker.
The rising interest rate would, on one hand discourage capital flight and on the other encourage savings habit.

Nepse to see rain of IPOs

With Nepal Stock Exchange (Nepse) index scaling a new high every day and looking towards the 900-point mark, multimillion offerings are set to rain on Nepse.
Some of the mega issues are: Rs 300 million worth initial public offering (IPO) of Global Bank, Rs 300 million worth IPO of Citizens’ Bank, Rs 500 million worth debenture of Salt Trading Corporation (STC) and Rs 250 million worth debenture of Himalayan Bank Ltd and Rs 128 million worth IPO of Nepal Development and Employment Bank Ltd, totalling to over one billion rupees. They are likely to be announced by February 2008.
Nepal Telecom (NT) is also planning to issue IPO amounting to Rs 1.5 billion — in two phases of Rs 750 million each. The first phase would be for its employees and the second, for the public. The NT’s IPO would be the biggest ever offering in the Nepse’s history.
However, NT should have issued its IPO long ago. Bureaucratic hassles delayed the floatation.
Similarly, Chilime Hydropower has also been long planning to raise Rs 240 million through an equity offering by the end of last year but it has not yet floated its IPOs for public till date. Chilime has floated the IPO for its employee and its shares are traded at the Nepse floor for Rs 1380 (on Thursday) per unit share.
Though Chilime is one of the successful hydro power companies that has been constructed with the indeginuous technology, its delay in issuing IPO for public is surprising. Chilime model is no doubt an example how Nepalis themselves can construct hydro power plant by raising money from the domestic market.
Apart from IPOs, some development banks and finance companies are issuing rights shares to increase their paid up capital according to the new directives of Nepal Rastra Bank (NRB), the regulatory body.According to the data of Securities Board of Nepal (SEBON), two development banks — Paschimanchal Bikas Bank Ltd and Bhrikuti Bikash bank Ltd, seven finance companies and Sagarmatha Insurance Company Ltd, an insurance company are in the pipeline to issue rights shares issue.
However, Invest Finance Company is planning to issue IPOs worth Rs 16 million and Arun Valley Hydro is also planning IPO with Rs 300 premium, according to the SEBON.
“With all these issues market is expected to cool down,” according to a broker. “The high demand and short-supply condition will be balanced with the new IPOs,” he added.