A merger is when two or more licensed entities merge to form a new entity. Mergers and acquisitions are involved in the merger process. A merged entity is a licensed entity that has agreed to accept the property, liabilities or business of the merging entity, while a licensed entity is a merging entity that transfers its assets, liabilities or business to the merging entity and ceases to exist after the merger.
Acquisition refers to the process by which a licensed entity incorporates another licensed entity into a procurement process. Acquisition is the act of accepting all the contractual obligations made by the target organization before merging with the receiving organization
After the merger of the two financial institutions, a new financial institution is formed, in which the management of both the institutions
New management is created to be representative. The CEO of the new company to be formed after the merger
The decision is made after discussing where to stay and where the central office will be. Both sides discuss whether the name of the bank should be changed or the name should be representative of both the banks. The CEO or central office is not changed upon receipt. The name of the bank does not change. Once the acquired bank is merged with the receiving bank, it ceases to exist. The procedure to be followed by the banks for merger or acquisition is the same.
Mergers or acquisitions are made between banks to enhance the banking system and strengthen the capital base. The pass enhances the bank’s financial, human resource, technical and other capabilities. NRB has a provision that no financial institution can proceed with the merger and acquisition process at the same time.