Prabhu Bank Limited 2018

Abstract

Prabhu bank ltd was formed as one entity after several mergers and acquisition of Kist bank ltd, Prabhu Development bank, Zenith finance and Gaurishanker Development bank in 2014 and Ashok Sherchan was appointed as a CEO of Prabhu Bank Ltd after the first merger in 2014. The decision to go on a merger with problematic Kist bank which was in huge trouble due to the big management issue for which CEO of the bank, Kamal Gyawali was found guilty leaving the industry in a shock. However, the decision to add another ailing bank, Grand bank, in 2016, raised the doubts about the health of the new entity which had incurred the loss of JPY 1.6 billion after it failed to recover the big chunk of loan. When Nepal Rastra Bank, Central Bank of Nepal issued the new monetary policy increasing the required Paid-up capital four times the previous policy, which is to JPY 8 Billion from 2 Billion in the time interval of 2 years, led the banking industry into pressure due to limited time which encouraged to go for mergers and acquisition to meet the issued requirement. Prabhu bank, therefore, decided to add another ailing bank, Grand bank in 2016 that raised the doubts of about the health of the entity. CEO Sherchan, despite all the risks in his head due to the problematic banks, took it as a challenge and molded M&A as a strategy to grow. Prabhu bank saw the huge transformation since 2014 under the leadership of CEO Ashok Sherchan with his new strategies and reformed policies and guidelines which he divided into five strategic pillars as 1) Prudent Business 2) Risk Management 3) HR Mgmt. & Capacity Building 4) Information System & Technology Management and 5) Transparency and Responsible Banking. With the increasing net profit year by year, Prabhu Posted JPY 1 billion in the fiscal year 2016/17 ensuring the positive growth and profitability.

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