NRB is planning to punish Prime Commercial Bank and Om Development Bank after the revocation of merger agreement

Prime Commercial Bank and Om Development Bank had been provided few days to reconsider their merger by Nepal Rastra Bank. Both the banks were asked to come back with their approved decision on 26^th April, 2019. However, the banks are not in the mood to reconsider the merger process.  Both banks have decided not to send the final application for merger process so the merger has been officially revoked.

However, Nepal Rastra Bank has decided to punish these banks. NRB says "the process will be replicated by other banks and merger will not be taken as a serious matter. Thus, we are forced to punish these banks. NRB will listen to both sides and analyse which bank deserves what kind of punishment. NRB will probably restrict these banks to announce their dividend, halt expansion of branches or so forth".

After deciding not to go into the process of merger, both banks are searching some other institutes for merger. Prime bank has been in conversation with Century bank and other regional banks whereas Om Development is in conversation with three commercial banks. Prime Commercial Bank and Om Development Bank had decided to go into merger with ratio of 82.50:1. The agreement had been done. However, at the end time, Prime Commercial bank and Om Development Bank came into disagreement with respect to employee’s position in the merger bank. Prime Commercial Bank wanted the employees of Om Development Bank to be allocated lower positions whereas Om did not want to compromise its integrity due to the merger.