Two Nepali finance companies - Narayani Finance Ltd (NAFIL) and National Finance Ltd (NFL) - officially merged to become Narayani National Finance Ltd (NNFL) on Tuesday.

It is the first time that financial institutions promoted by separate groups have merged in Nepal's banking history.

The merger process started two years ago and a joint meeting of the boards of directors of NFL and NAFIL on May 10 had approved the move.

The paid-up capital of the new company has reached Rs. 433.3 million by combining National's Rs. 217.4 million and Narayani's Rs. 215.9 million.

The NNFL will also soon issue rights share in the ratio of 1:0.5 to upgrade itself to a development bank.

As per the Nepal Rastra bank (NRB) rules, It is necessary to increase the paid-up capital to Rs. 640 million to turn a finance company into a B class development bank.

NNFL has five branches in Kathmandu, Itahari and Narayangarh, and in Bharatpur and Ratnagar (Tandi) of Chitwan district. It is also planning to add five more branches within this fiscal year. It is also planning to open three new branches in Kathmandu Valley and two outside the valley. nepalnews.com

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