Nepal's Mega Bank Nepal Ltd. agreed to merge with Tourism Development Bank Ltd. to meet capital requirements, The Rising Nepal reported Jan. 20.
Mega Bank will be the surviving entity following the merger. Terms of the deal were not disclosed.
The proposed merger is part of Mega Bank's efforts to meet Nepal Rastra Bank's directive, which requires commercial banks to boost their paid-up capital to 8 billion Nepalese rupees by the end of the current fiscal year. Mega Bank and Tourism Development Bank currently have paid-up capital of 4.01 billion rupees and 919.7 million rupees, respectively.
The Mega Bank-Tourism Development Bank merger is the latest M&A deal in Nepal's fragmented banking sector. Previously, Tourism Development Bank bought out Matribhuvi Bikas Bank and Kalinchok Development Bank. Meanwhile, Mega Bank acquired Pashchimanchal Development Bank Ltd. in April 2016, according to a report in The Himalayan Times.
As of Jan. 20, US$1 was equivalent to 109.06 Nepalese rupees.