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Nine companies await licences
- merchant banking
KATHMANDU, JUN 06 -
Two hopeful merchant bankers have applied to the Securities Board of Nepal (SEBON) for a license while seven already in operation have applied to have their licenses transferred to their subsidiaries.
Laxmi Bank has applied for a license for its subsidiary Laxmi Capital Market. Akash Investment plans to engage fully in merchant banking without getting involved in other banking activities. Ace Development Bank, NIDC Capital Market, NMB Bank, Vibor Vikash Bank, Nepal Finance, Nepal Share Market and Nepal Sri Lanka Merchant Banking and Finance are seeking SEBON's go-ahead to transfer their merchant banking licenses to their subsidiaries.
The subsidiaries of the first five companies are Ace Capital, NCM Merchant Banking, NMB Capital Market, Vibor Capital Market and Nepfinsco Merchant Bank respectively. Nepal Share Market and Nepal Sri Lanka Merchant Banking are yet to finalise the names of their subsidiaries, said officials of the respective companies.
As per Nepal Rastra Bank's recent directive, A, B and C class financial institutions can operate as merchant bankers by establishing subsidiary companies with equity investment of the concerned banks and financial institutions. They are required to obtain approval from SEBON.
Merchant banking includes operating as sales and issue manager, underwriter (pledging to purchase unsold shares during IPO), share registration, portfolio management and institutional investor. CEO of NMB Bank Upendra Paudel said they were seeking SEBON's approval for transferring the license to the bank's subsidiary NMB Capital Market. Ace CEO Siddhanta Raj Pandey said the new company would start operations within two to three months after getting SEBON's okay.
The companies will have to transfer their licenses to their subsidiaries by the end of the current fiscal year as per the deadline set by SEBON and NRB. SEBON director Neeraj Giri said that SEBON would cancel the licenses if they were not transferred by that date. There are 17 merchant banks that have obtained licenses including a new company Nabil Investment, a subsidiary of
Nabil Bank.
Among them, six companies are fully engaged in merchant banking, and they are required to establish subsidiary companies to continue their businesses.
Posted on: 2010-06-07 07:57
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