Contemporary Research Analysis Journal

Mergers and acquisitions (M&As) have emerged as pivotal elements in the consolidation of the banking sector in Nepal, signifying efforts to cultivate more robust, efficient, and resilient financial institutions. This study explores the rationale, opportunities, challenges, and implications of M&As within Nepal's commercial banking sector, with a particular focus on the role of the Nepal Rastra Bank in facilitating consolidation. Employing a descriptive and analytical methodology grounded in secondary data, the analysis reveals that M&As have the potential to enhance capital adequacy, support economies of scale, improve risk diversification, augment technological and digital banking capabilities, and expand market reach. However, these potential benefits are dependent on successful post-merger integration. The paper contends that the mere legal completion of a merger does not guarantee its success; rather, sustained strategic planning, thorough due diligence, transparent human resource management, customer-centric service delivery, effective risk management, and ongoing regulatory oversight are crucial. When managed effectively, M&As can contribute to a more stable, competitive, inclusive, and technologically advanced banking sector in Nepal.

mergers and acquisitions, commercial banks, financial consolidation, Nepal Rastra Bank, banking sector, financial performance

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