Nepal Investment Bank and Himalayan Bank on Thursday signed a memorandum of understanding to merge, and once complete, the new entity will be the largest commercial bank in Nepal.

The memorandum of understanding was signed by Prithvi Bahadur Pandé, chairman of Nepal Investment Bank and Tulsi Prasad Gautam, chairman of Himalayan Bank.

Thursday’s development has officially paved the way to complete formalities before the process to start the joint operations between the two commercial banks.

After the merger, the banks will be known with the unifying name as Himalayan and Nepal Investment Bank.

According to a joint press statement issued by the banks, Prithvi Bahadur Pandé will be retained as chairman of the bank while Ashoke Shamsher Rana will be the chief executive officer.

Similarly, the board members post-merger will comprise three members each from both banks. There will also be one independent member thus making a total of seven members on the board.

At present, the paid up capital of Nepal Investment Bank stands at Rs16.26 billion whereas Himalayan Banks paid up capital amounts to Rs10.68 billion.

After the merger, the combined paid up capital of the banks will reach a staggering Rs26.14 billion, making it the bank with the highest paid up capital in the country.