Kathmandu. Nepal Rastra Bank has instructed Himalayan Bank not to distribute the proposed cash dividend until a written commitment of merger is made. Although the NRB has approved the dividend as proposed by the Himalayan Bank, it has asked for a written commitment to conclude the ongoing merger process with Nepal Investment Bank before distributing the cash dividend.

Chief Executive Officer of Himalayan Bank, Ashok Rana, clarified that a written commitment of merger was sought before the distribution of cash dividend even though the central bank approved the distribution of dividend proposed by the bank for the last fiscal year.

The 412th meeting of the Board of Directors of Himalayan Bank was held on September 7, 2008. And. From the distributable profit amount of 2077/78, 21.68% of the existing paid up capital of Rs. % I.e. cash dividend of Rs. 493.61 million was proposed. Although the proposal was approved by the central bank, a written merger commitment had to be submitted before the cash could be disbursed.

Recently, the financial condition of Himalayan Bank Nepal Investment Bank was bad, many large loan files were missing, there was no good corporate governance and the Auditor General's Office had tried to avoid the merger saying that the investment bank had to bear the tax burden of around Rs 5 billion. However, the central bank has made it a condition that Himalayan Bank be forced to merge against the law.