Banks girding for merger mania

Companies should be the ones to decide if and when to merge, not government edicts.

Markets are at work in Nepali banking. Under the previous leadership, Nepal Rastra Bank, the country’s central bank, did its best to convince commercial banks to actively pursue mergers and acquisitions (M&A) and was pretty much paid with lip service. The 2019-20 monetary policy went so far as to lay down several measures to encourage banks to tie the knot. One carrot used was letting the board of directors, CEOs and deputy CEOs of merged banks to leave and find another banking job right away; before that, they were restricted by a six-month cooling-off period during which they were barred from working for another bank. This, among other incentives, failed to bear any fruit. Now, things are happening organically.