The Ministry of Finance has formed a working group to study the merger between Nepal Bank Limited and National Commercial Bank.

After Nepal Rastra Bank instructed private sector banks to increase their paid-up capital or go for the merger, the government has also advanced the process of merger between the two government banks, Nepal Bank Limited and Rashtriya Commercial Bank.

Bhupal Baral, head of the financial sector management division of the ministry, has been assigned as the coordinator of the merger-related task force.

Currently, Nepal Bank’s paid-up capital is 14.69 billion rupees, while National Commercial Bank’s paid-up capital is 15.63 billion rupees. By the third quarter of the financial year, Nepal Bank has managed to collect deposits of 229 billion rupees and extended loans of 173 billion rupees.

Nepal Bank has made a profit of 1.78 billion 2.3 million rupees by the end of March, while the bank made a profit of 2.19 billion rupees during the same period last year. Bank’s bad loans are 4.16 percent. As the profit has decreased, the distributable profit of the bank has also decreased. In the middle of March, the distributable profit of the bank has been limited to 180 million. During the same period last year, the bank’s distributable profit was Rs 2.70 billion.

On the other hand, the National Commercial Bank has made a profit of 3.57 billion rupees in the third quarter of the current financial year. In the same period last year, the bank made a profit of Rs 2.61 billion. By the end of March, the bank has collected 302 billion deposits and disbursed loans of 225 billion rupees. Bank’s bad loans are 3.88 percent.