Welcome to ebirgunj.com

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1. Birgunj Finance Ltd., Birgunj
2. Mahalaxmi Finance Ltd., Birgunj
3. Siddhartha Finance Ltd., Bhairahawa
4. Butwal Finance Ltd., Butwal and
5. Himchuli Development Bank Ltd., Pokhara.

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First of all let me explain to your first question that why we decided to merge with each other to a single one company. We all 5 individual companies are separately working in own sector with limited scope of job. We all are starving for the excellence within a narrow horizon, which itself is an almost impossible for each of us. So what I mean to say is the basic reason of taking each of us to merge with each other are as followings:

i) To increase the Capital as instructed by the Regulator from time to time.
ii) To convert into a commercial bank which is the ultimate requirement of each small and individual companies.
iii) To enhance the capital, operational and professional strength of the company.
iv) To convert all of us to one of the big commercial bank’s stake holder.

Now, explaining to the second question that what are the benefits for this merger that a customer can get. Each of the customers who are now associated with all the 5 companies would automatically be upgraded to the customer of a big commercial bank. After merger all the customers related with deposit/lending would get entire facilities that is being provided by the commercial bank after being converting into a commercial bank. In addition to that those facilities like LC transaction, Foreign Exchange transaction, Corporate Financing, Business financing Remittance facilities and many more which are restricted for us now would be made available to our customers.

Now coming to the third question that what are the risk factors associated with it. Obviously, any new big and ambitious project would be associated with certain risk factors and similarly this project of merger, capital raise and then converting into a commercial bank also has lots of risks and threats. First of all it has risk that we have to expand our working horizon in order to make more profit for serving more capital, which is a very tough target in today’s cut-throat competition. Secondly, all the promoters and directors of each individual companies would loose their direct intervention or interference in daily business of the company for which the new management of the merged company will have risk of losing business for which the new management has to run the company very much professionally and with utmost care. Thirdly there is the risk of policy change in between the materialization of the project due to the possible interference of the present members of the Bankers’ Association with the increased risk to the existing banks. Fourthly, there is internal risk to us after merger in regard to the human resources because we have all competent resources for performing as the resource of finance companies only but after being merged and upgraded, we need expert human resources for new work areas like trade finance, foreign exchange, remittances and other corporate businesses. So these are the basic threats and risks which are anticipated that we have to face but in side by side there are ample opportunities also.

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The customers of each 5 individual companies have several reasons and factors that will definitely led to them to feel fully satisfied being as the client of these companies. Some of these factors are highlighted here:

i. Customers will get all possible advanced and new banking products from the company after being merged and upgraded to a commercial bank.
ii. Customers will get diversified facilities of remittance and money transfer easily, they need not go to other banks for these facilities.
iii. Still we have the experience that due to lack of wide working horizon of these 5 companies more customers are paying additional sum of amount for availing those services which we do not have now. But after this decision, those customers must have a very high level of satisfaction that they can get now entire package of service from our single door.
iv. They may feel that they are the customer of country’s largest commercial bank in terms of capital strength.
v. They will definitely feel that the new and refined services are being catered to their doorsteps without any efforts.
vi. On top of all the customers will feel very high security of their money and investments with the placement in a largest capital bank.
vii. Now they may have small feeling that all the 5 companies are playing in their own domestic territory which may have risk in investing their hard earned money but after this decision of merger and capital raise they will have strong feeling of professional approach and customer service oriented goal of the company.

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Present shareholders would be automatically upgraded to a shareholder of a commercial bank after getting merger and upgraded to bank. Thenafter there are benefits and benefits to them in terms of getting highly liquid assets of share and capital appreciation of their share in the capital market. The shareholder will have more benefits in terms of return to their investment also as we all have ready made business portfolio from starting of business as a commercial bank with regional dominance in each sector. Their personal interference in the daily working of the company may be lost but they will get maximum financial benefits in all terms after successful completion of merger.

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All the staffs of each companies would continue working in the same place to the extent of possibilities. However their performing capacity would be reviewed by the new professional management and replaced in the appropriated place according to their competency level. But it has been assured that the present financial benefits would not be reduced but the benefits may be increased also depending on their performing capacity.

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The understanding of the formation of the board of the new merged company have already been drawn up according to which each of the present companies would represent in the board in proportionate basis and the chairman would be selected among them by mutual consent. But it has been agreed that the CEO would be hired from the market and existing CEOs of each companies would be continuing in various managerial capacities depending on their performance level.

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After getting merger we will enhance the capital in order to upgrade it to a new national level commercial bank with a paid up capital of Rs. 200 crores, which will be a highest capital bank in Nepal. All the present head offices and branches would continue functioning as branch of the new commercial bank and wherever there are multiple branches after merger they would be re-located or merged depending upon the necessity. Then after formal start of operation as commercial bank we will start increasing network throughout the country where we have not any branches now. We will strive ourselves to recognize this new bank as one of the top rated bank in all respects.

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Yes, We have started a big ambitious project, which is the real necessity of the country also and an open requirement of the regulator, Nepal Rastra Bank. We request all the stake holders and well wishers to support on every possible aspects of its process. It would be a grand history in the country and would become a major mild stone step towards the construction of new Nepal. So I request once again all the concerns to support this process and if it is not possible at least please don’t disturb the good purpose of this project.
Thank You.