Hiring an advisory firm to support the merger of New Kabul Bank and Bank-e-Mille AfghanNPA Ref. No.: NPA/MOF/1400/CS-946/QCBS


Publish Date

Closing Date

STEP/Procurement Plan Ref No: MASOB/AF/G-67

The Government of the Islamic Republic of Afghanistan (GOIRA) has received financing from the International Development Association (IDA) toward the cost of the Modernizing Afghan State Owned Banks Project and intends to apply part of the proceeds for consulting services.


The consulting services (“the Services) under the project include support for the financial, legal, operational, organizational, and administrative merger of the two state-owned banks, Bank-e-Millie Afghan (BMA) and New Kabul Bank (NKB).


Both BMA and NKB are licensed and supervised by Da Afghanistan Bank (DAB). BMA retains a full banking license and NKB does not undertake lending activity due to regulatory restrictions. BMA is the largest state-owned bank in Afghanistan, and the second largest commercial bank in the country, accounting for 14.2 percent of the banking sector assets. NKB has an extensive branch network and is thereby able to provide a unique set of payments services to the Government. NKB comprises 7.2 percent of the banking sector assets. A merger of NKB with BMA will complement both institutions’ strengths by leveraging the payment specialization and outreach capabilities of NKB, and asset management and lending experience of BMA, to create a more efficient entity able to reach a broader swath of the Afghan population. The merged institution will leverage the capacity of both institutions with the goal of establishing a fully commercial and financially self-sustainable bank. The guiding principle behind the activities is to identify the steps required to bring the two banks together into one fully functional and viable entity with a business model that combines the activities currently undertaken by the two entities. The merged bank will be positioned as a 'universal bank' in providing commercially viable and competitive retail banking and payment services to all segments of the Afghan economy.


The objective of this assignment is to conduct requisite technical work towards the successful merger of the two banks, including: i) a financial and operational due diligence of BMA and NKB and preparation of a merged balance sheet reflecting any changes to balance sheet values identified in the due diligence process; ii) the preparation of a business plan for the merged institutionincluding identification of specific restructuring measures, as needed, to ensure the viability of the merged bank; and iii) the preparation of a merger master plan (MMP) for the implementation of the merger, including full legal, operational, and financial integration of the two banks into a single viable entity.

The principal objective of this assignment is to conduct requisite technical work towards the successful merger of the two banks, through a three-phase process. An indicative list of the Services to be provided in a three-phased approach over a period of up to 12 months includes:

  • Phase 1: Diagnostic Due Diligence of BMA and NKBand preparation of the pro formaopening balance sheet of the merged banks. The Consultant will conduct a thorough assessment of the operations and financial viability of both BMA and NKB including, but not limited to, asset quality (credit and other assets) and confirmation of ownership of assets; legal status; shareholding structure; operational capacity and organizational structure; review of policies and processes; stocktaking and review of all foreign and domestic subsidiaries, affiliated entities and/or non-core assets; finance and accounting, including financial sustainability; scope and viability of their branch networks; governance and management effectiveness; situation as regards use of information technology (IT); human resource policies and capacity (HR); and other matters as relevant.Should the asset quality component of the due diligence reveal that pre-merger adjustments to the values of assets, liabilities and capital of the banks are required, the consultant will identify in detail the adjustments required and prepare the pro forma opening balance sheet for the merged banks reflecting these adjustments. In addition, where the consultant identifiesthat specific restructuring measures are needed to ensure the viability of the merged bank, the report will specify these measures with a view to ensuring the success of the merger.


  • Phase 2: Development of a three-year business plan for the merged bank.Using the pro formaopening balance sheet prepared in Phase 1,the business plan for the merged institution will build on realistic and prudent assessments of the merged bank’s incomes and expenditures for the first 3 years after the merger, a financial plan documenting the bank’s financial viability post-merger and codification of policies and procedures with a view to identifying a unified approach for the merged entity. Should there be a need, the business plan will also include proposals for the process, procedures and timeline required to resolve non-performing loansand steps required to ensure that the merged bank is adequately capitalized. The plan should include a scheme for rationalization of ATMs, offices, branches, subsidiaries and/or other affiliated entities,  customer retention and external communications plan, as well as a new HR framework for the merged entity, including the identification of staffing needs and development of redundancy plans, as required.The business plan will include preliminary recommendations for a new organizational structure, risk management architecture, integration of human resources, integration of policies and procedures, and integration of IT systems. The integration of the IT platforms of the two banks will be a key area of focus, as NKB recently procured a new IT system (i.e. Oracle Flexcube 14.3 Core Banking Solution) which is pending full installation. The Consultant will also assist the Ministry of Finance in revising the management and governance structure. Specific inputs will also be provided on tax implications of the merger and eventual tax optimization strategies.


  • Phase 3: Master Merger Plan. The Consultant will draft a time-bound Master Merger Plan (MMP). The MMP will aim to address gaps identified in the previous phases and, as far as possible, the seamless integration of all functions, processes, products, policies, systems and working models of the two banks, reallocation/rationalization of management and staff responsibilities, integration/rationalization of branch network, subsidiaries/affiliated entities, and integration of IT and banking systems. The intention is that these activities will be undertaken without causing adverse impact on customer services, customer acquisition, employees, and other stakeholders. The MMP will include: i) a list of specific actions towards the completion of the merger; ii) the designation of institutional responsibility for the implementation of these actions, clearly identifying those parties responsible for implementing the plan; iii) terms of reference for each of the actions that might require technical support of external consultants; iv) a clear timeline for the implementation of each action and the overall project leading to full completion of the merger; and v) the external communication plan for the merger process.


TheMinistry of Finance (MOF) now invites eligible consulting firms (“Consultants”) to indicate their interest in providing these Services. Interested Consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform these Services.


The Shortlisting Criteria:


Interested Consultants should provide the following information, not to exceed 10 pages, as part of their Expression of Interest.


  • The Consultant should be an international public accounting firm which has been in operations for at least 15 years. The Consultant is required to provide the Copy of the Certificate of Incorporation issued by the relevant authority in the country of its establishment.
  • The Consultant should demonstrate expertise in advisory projects in multiple jurisdictions involving commercial banking operations, including bank restructuring and the execution of merger and acquisition of commercial banks. To this end, the Consultant should provide evidence that it has carried out at least foursimilar successful commercial bank reform projects in different jurisdictions in the last 5 years, of which at least two have been in emerging markets (e.g. Asia, Africa, Europe or others as appropriate).
  • The Consultant should demonstrate specific experience in projects involving commercial banking IT and systems operations and integration.
  • Subject to meeting all of the above criteria, experience working on similar projects in Afghanistan, or the immediate region, fragile, conflict and violence affected countries, and/or assignments financed by international development institutions, such as the World Bank Group,will be considered an advantage.

In illustrating compliance with the above criteria the Consultant should listkey details regarding similar projects it has undertaken indicating the client name, activities carried out, duration, value, and years of performance, to provide evidence of the expertise/strength of the Consultant for this project. The Consultant while describing the assignments for similar experience should list the following details for select projects:

  • The Consultant should brieflydescribe in what way the executed assignment(s) was/were similar in nature to the current assignment.
  • The Consultant should brieflyexplain the exact role played by the Consultant in executing the assignment and, also, if the assignment was carried on in association with another firm or as a sub-contractor.

Key Experts will not be evaluated at the shortlisting stage and details should not be submitted as part of the expression of interest.

Consultants may associate with other firms to enhance their qualifications but should indicate clearly whether the association is in the form of a joint venture and/or a sub-consultancy. In the case of a joint venture, all the partners in the joint venture shall be jointly and severally liable for the entire contract, if selected. The requirements for Consultants which intend to associate with other firm(s) in the form of a Joint Venture (JV) or a sub-consultancy to enhance their qualifications are indicated below.However, the short-listing criteria will not be applied and considered for sub-consultant.

    1. The lead partner is required to be identified clearly and state the composition and nature of their association (JV/ sub-consultant) in their EOI.
    2. In case of JV, all partners i.e. the lead and JV member/s shall meet 100 percent of the shortlisting criteria of (1) (2) (3) and (4) above. 
    3. In case of Consultant who intends to associate with other firm(s) in the form of a sub-consultancy, the lead partner shall meet 100 percent the shortlisting criteria of (1), (2) (3) & (4) above.
    4. Eligibility requirements in compliance with paragraphs 3.21, 3.22, & 3.23 of the World Bank’s Procurement Regulations for IPF Borrowers, Procurement in investment Projects Financing, Goods, Works, Non-Consulting and Consulting Services July 2016, Revised November 2017 and August 2018.
    5. The Consultants, all partners in the case of JVs, and potetnial all Sub-Consultant should all have active and valid business license and should not be debarred by World Bank or the National Procurement Authority.

The attention of interested Consultants is drawn to paragraph 3.14, 3.16 and 3.17 of the World Bank’s Procurement Regulations for IPF Borrowers, Procurement in investment Projects Financing, Goods, Works, Non-Consulting and Consulting Services July 2016, Revised November 2017 and August 2018, setting forth the World Bank’s policy on conflict of interest.

A consultant will be selected though Quality and Cost Based Selection (QCBS) in accordance with the procedures set out in the World Bank’s Procurement Regulations for IPF Borrowers, Procurement in investment Projects Financing, Goods, Works, Non-Consulting and Consulting Services July 2016,Revised November 2017, and August 2018.

Expressions of interest must be delivered in a written form to the address below (in person, by mail, or preferably by e-mail) by 12 May 2021by 15:00 Hours. (Kabul Local Time). The EOIs submitted by the consultants should not exceed 10 pages. Further information in respect to this REOI can be obtained at the address below by email or in person during office hours [08:00-16:00 Hours].

         Attention: SafiullahAlokozai, BFS Manager

         National Procurement Authority

         Administrative Office of the President

         Pashtunestan Wat, Kabul, Afghanistan


Email:safiullah.alokozai@npa.gov.af, copied to shekiba.hajizada@npa.gov.af, hikmatullah.asad@npa.gov.af, Jawad.ahmadzai@mof.gov.af,shahenshah.sherzai@mof.gov.af



Web site: www.npa.gov.af

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