NRB aks MFIs to submit a merger action plan

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MFI
Aditya Chaudhary

Microfinance financial institutions (MFIs) that want to merge must submit an action plan by mid-July next year, according to the Nepal Rastra Bank (NRB).

On Monday, the National Reserve Board’s Department of Banking and Financial Institutions Regulation issued an order in this respect.

Similarly, the NRB has directed banks and financial institutions with a cross-holding of more than ten percent to merge or purchase each other in order to minimize the number of MFIs. In the case of MFIs founded by commercial banks, development banks, and finance firms as founding owners, such an arrangement will be appealing.

“Banks and financial institutions with more than 10% ownership in another bank or financial institution, as well as microfinance institutions owned by or with more than 51% shares in A, B, and C class banks and financial institutions, are directed to submit their merger action plans by mid-July 2022,” according to the NRB directive.