KATHMANDU: Nepal Rastra Bank has completely removed the previous system of stopping share trading when banks and financial institutions merge or acquire. The central bank has amended the regulations related to the merger/amalgamation and acquisition of banks and financial institutions and removed the provision to stop share trading.
According to the provisions in the monetary policy, this issue will be decided by the Securities Board of Nepal. The board is going to arrange that the share trading of ordinary investors in organized organizations going for merger and acquisition will be stopped for a maximum of 15 days.
Similarly, it is mentioned in the regulations that the Infrastructure Development Banks cannot be merged or acquired by other banks and financial institutions. According to the regulations, after obtaining the theoretical consent for merger, merger or acquisition, the assets, liabilities and transactions of the merging or target organizations should be evaluated by the appraiser.
If the central bank deems it necessary, it can also give instructions for the evaluation of the additional period. But those organizations can have assets, liabilities and transactions evaluated before applying to the National Bank for theoretical approval.
There is a provision to calculate the base net worth by giving 75 percent weightage to the calculated adjusted net worth of the merging entities, 20 percent weightage to business valuation and 5 percent weightage to the amount determined based on the average trading price of the last 180 days published by the Nepal Securities Exchange Market.