Rastriya Banijya Bank to hire young employees

KATHMANDU: Rastriya Banijya Bank is looking forward to hiring more young employees in order to transform the bank into a more competitive and modern structure.

“At present, the average employee age of the bank is 49, and the bank is planning to bring new and young manpower that will bring down the average employee age to 37 within three years,” said CEO of Rastriya Banijya Bank (RBB) Krishna Prasad Sharma during a training programme for the bank staff.

“We have to emerge as a strong and modern bank in terms of technology, financial resources and manpower,” he said.

RBB had recently hired five financial analysts, 15 deputy financial analysts, agriculture officers and

legal officers through open competition.

“When other banks are suffering from high credit to deposit ratio, ours stands at around 50 per cent,” pointed out Sharma.

“We have enough disposable financial resources to expand credit, and due to low cost of fund we can offer credit at competitive rates as well,” said Sharma, informing that RBB will

focus on quality and productive projects to finance.

RBB — a wholly government owned bank — had undergone a decade-long financial restructuring programme for being on the verge of a meltdown. The bank’ non-performing assets, which was higher than 60 per cent a decade back, has finally come down to six per cent and its net worth has become positive.

The bank, which has 141 branches, has collected

deposits worth Rs 85 billion and floated loans worth

Rs 43 billion along with

investments of Rs 24 billion till first quarter end.

Source: The Himalayan Times, 3rd May 2013

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NRB relaxes Know Your Customer rules

The Nepal Rastra Bank has allowed banks and financial institutions (BFIs) to determine themselves the requirements that customers have to fulfil while opening bank accounts with deposits less than Rs 500,000.

Moreover, people can also open bank accounts by producing photocopies of passport, permanent account number (PAN) cards, identity cards of government, public and private offices. In case of teachers, professors and other staff of government schools, colleges and universities, they can open accounts by producing photocopies of their identity cards provided by the institutions they are working, states new “Know Your Customer” directive issued on Friday.

The revised directive has also removed the earlier provision that required individuals to produce citizenship number of ancestors going back to three generations, limiting the requirement to disclosure of personal information and names and surname of three generations.

“The new KYC directive has surprised me because the NRB has given us more than what we wanted,” said Ashoke Rana, chief executive officer of Himalayan Bank Limited. “This has enabled all to open accounts. This will help increase the number of bank accounts.”

The central bank’s move came after complains from BFIs that the previous provisions caused sharp decline in new account opening and even old depositors started closing their accounts.

“The move was taken to ease account opening and is based on international practices,” said NRB Spokesperson Bhaskarmni Gnawali. “We simplified the provision after consultations with the Financial Information Unit (FIU), which looks after money laundering issues.”

According to the NRB directive, this provision is only applicable to those willing to open new accounts. Existing accountholders will not have to produce new documents. Gnawali, however, said the provisions for foreigners have not been revised.

President of Nepal Bankers’ Association Rajan Singh Bhandari welcomed the NRB move, saying it would encourage account opening at a time when existing accountholders were also seeking to close their accounts due the lengthy re-verification process. “Letting people open bank accounts by producing documents other than citizenship certificates is a welcome move. Such practices are prevalent in the US and Europe too,” he said.

Source: ekantipur.com, 6th April 2013

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OMA Emirates launches subsidiary in Nepal

OMA Emirates — a leading global business solution provider in the Middle East — has announced the launch of its subsidiary OMA Nepal.

With the launch of OMA Nepal, the company based in Dubai brings its wide range of product and service offerings to the financial sector of Nepal, said group chief executive of OMA Emirates Niranj Sangal, here today.

The company provides cutting edge technology solutions in the area of card personalization, payment issuance and payment acquiring systems through a global delivery platform, he said, adding that the company has provided its service to Himalayan Bank in Nepal.

The pioneer of payment solutions of the Middle East has successfully completed the NanoSwitch for Himalayan Bank.

NanoSwitch is a fully integrated banking Switch and Card Management System (CMS) that is capable of managing ATM and Point of Sales devices and acts as the central interface for all payment and banking activities.

“With our in-house team of qualified and creative software developers, we provide a full fledged and flexible system that takes cognisance of the entire issuance and acquiring requirements of Himalayan Bank,” chief executive of OMA Emirates Niranj Sangal added. “Moreover, our indigenous solution is highly cost effective from the financial aspect of the project.”

“As one of the most prominent banks in the country, we have an ongoing need to modernize our banking systems and lead the way for other financial institutions,” said chief executive of Himalayan Bank Ashoke SJB Rana, on the occasion.

“The bank looks forward to a rewarding experience in our partnership with OMA Emirates in creating an indigenous NanoSwitch solution,” he said, adding that the complete guidance extended by OMA’s highly skilled professionals and ease of installation met the bank’s clear cut requirements.

“The implementation of the new system — that cost the bank $300,000 — will be completed by mid-March,” Rana said.

OMA Nepal is dedicated and fully committed to serving the different industries including the banking and finance sector of Nepal, according to the company.

“With OMA Emirates drawing huge success across several markets in the Middle East, Europe and Asian subcontinent, the company looks forward to attaining the same with the launch of its subsidiary OMA Nepal, in the country,” the company said.

OMA also plans to launch a full-fledged support, and Research and Development (R&D) centre to provide end-to-end service to its customers as it is aiming at providing Business to Consumer (B2C) services. “Its facility shall also provide support services to East Asian countries.”

Source: The Himalayan Times (Feb 4th, 2013)

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New NRB Rule-Nepal might experience increased remittance inflows

Remittance inflow might see an increase as commercial banks can now open a liaison or representative office outside the country.

Commercial banks that have fulfilled the basic criterion according to the central bank’s rule can now open a representative or liaison office outside the country, Nepal Rastra Bank (NRB) said today.

They must, however, have minimum basic paid up capital, been maintaining one per cent more buffer capital since the last one year, have Non Performing Assets of less than five per cent for the last three years, and the central bank must not have penalized any of the directors within the last six months.

Those commercial banks that fulfill the criterion must first apply at the central bank with financials of the last three years, declaration of its capacity to abide by the regulation of the regulatory authority of the concerned country where they are willing to open a representative or liaison office, besides a feasibility study and the bank’s board decision, said Nepal Rastra Bank that will permit banks with time restriction, if the applicant fulfills all the criteria.

Commercial banks must get approval from the concerned country’s regulatory authority within six months and a final approval from the central bank to open a representative or liaison office that must come into operation within six months and they must inform the central bank.

“Commercial banks must take approval from the Foreign Exchange Department of the central bank for the foreign currency needed to open an office in a foreign country,” NRB added.

Commercial banks have been asking the government and the central bank to allow them to operate offices outside the country.

Some of the commercial banks have, even, been planning to open a liaison office in the key remittance originating countries like India to officially channel in remittance through banks. Though a World Bank report has projected remittance inflow growth rate to slow down, a large chunk of remittance inflow from India has not yet been completely utilized through formal banking channels making it difficult to track its contribution to the total remittance.


Recently, Global IME Bank had sought the central bank’s permission to open a liaison office in New Delhi, India, to channel the remittance inflow through the bank.

The Monetary Policy has also promised commercial banks to allow them to open offices outside the country, though earlier, the Unified Directives 2010 had allowed only licensed institutions established with foreign equity participation to open a liaison or representative office according to the conditions stipulated by the central bank.

Source: The Himalayan Times (Jan 31st, 2013)

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Gurkha Development Bank Seeking Investors

Gurkha Development Bank (GDB) on Thursday issued a 35-day notice to potential buyers of its promoter shares in a bid to reduce the stake of its original promoters. The move follows a takeover of its management by Nepal Rastra Bank (NRB) for failing to show improvements after it was declared crisis-ridden.

GDB’s three major promoters — DB Bamjan, Rakesh Adukiya and Nirmal Gurung, all of whom are facing charges of banking fraud — own 45 percent of the bank. They and the other promoters hold a 60 percent stake in the bank. “The notice to sell shares was issued as per the mandate given by the central bank to ensure that the present promoters would not have influence in the bank in the future,” said Mukti Sapkota, a member of NRB’s management team at Gurkha. The central bank had taken over the reins of the troubled development bank on Jan 3. It was declared crisis-ridden in March 2011.

Sapkota said that the bank had not fixed any specific ratio by which the shares of the present promoters would be reduced. “This will based on the proposals received from prospective buyers,” he added. According to him, the share price will be determined through negotiations based on the value fixed by the ongoing due diligent audit (DDA) report. The DDA is expected to be completed within the next 40 days.

GDB has stated in a notice that persons facing charges under the Banking Offence and Punishment Act would not be eligible to purchase its shares. NRB has given three instructions to its management at GDB. First, reduce the stake of the current promoters by bringing outside parties. Second, if outside parties cannot be brought, go for a merger. If both options fail, the team has been told to recommend appropriate alternatives. “The last option could be to liquidate the company,” said an NRB official.

The new management has also made efforts to recover loans from 20 major borrowers. It has given them until Jan 28th to repay their loans with the offer of concessions. “A few of them have shown interest to repay their loans,” said Sapkota. “Stringent action will be taken against defaulters including seizure of their passports as per the Bank and Financial Institution Act.”

These 20 debtors owe GDB Rs 1.17 billion including principal and interest. “Promoter related loans amount to Rs 700 million,” said Sapkota. Most of the loans issued to these borrowers have been recognized as bad loans. “There are good loans worth around Rs 400 million too,” added Sapkota. The bank currently holds deposits of around Rs 2.16 billion while its loans stand at Rs 2 billion. Its capital adequacy ratio has remained negative, according to the development bank.

Source:The Kathmandu Post (January 25th 2013)

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