Bhuwan Dahal, President, Nepal Bankers Association, & CEO, Sanima Bank
How is Sanima Bank taking ahead its activities?
Some of the banks are hustling. However, we are at our own pace. We are a little laid back in terms of branch expansion. Nonetheless, if you see in terms of quality, we stand among the A-listers. We are strategizing to make it absolutely managed, irrespective of fewer branches. Some focus on branch expansion and some on quality. We are focusing on the latter. We are happy in however we are.
Then, what is the strong aspect of Sanima Bank?
We are working on (Asset and liability management) banking, which is very important. We are also attentive towards risk-management. We are planning not to compromise on corporate governance. The institution gets better if the institutionalized governance does. We spare those who make mistakes while learning and working. But, we impose zero-tolerance policy on those conspiring to play with people’s money.
Therefore, following the international banking system, we will increase the services and facilities for our customers. Technology has dominated today’s time. We shifted to ‘click banking’ from ‘big banking’. We are working on emphasizing the same.
Of late, banks are coming up with various offers, schemes, and services in order to attract customers. Where does Sanima stand on this?
We are also in the flow. As every day is a new day, we are also bringing something new. We are working as per the demand and requirement of the market. Despite fewer branches, we still stand among the bests. Banks have their own respective strategies. With respect to the same, we are not running after branch expansion. More banks in a small market can divide the business, ultimately leading to loss in the whole economy. We want to compete with the banks in areas with potential markets.
Who are the target customer groups of Sanima Bank at present?
They are both economic and business groups. We also have micro-finance, agriculture, retail loan, corporate and project finance departments among others. We have provisioned every kind of loan. We also have plenty of depositors with small savings. By and large, we have more than 61 percent of personal deposits. We have only 25-26 percent of institutionalized deposits of the Rastra Bank. The micro-finance group comes forth in seeking loans. There are only 35 percent big loans.
Banks are seen working hard for deposits. How is Sanima working on this?
It is pretty difficult in a country like Nepal where only around 4-5 billion of money is deposited. On top of it, there are 27 commercial banks. We are working hard on this.
You are the president of Nepal Bankers Association. How is the new tenure going on?
We are still the best in the south-Asian banking sector. If you check CAMEL’s rating, Nepal’s banking condition is excellent. However, it doesn’t mean we have achieved cent percent scores. However, we are definitely in ‘distinction’. There are a few drawbacks. We are certainly moving ahead by improving the same. Right after my election as the Association President, we have started working by forming three different committees in the first ever meeting. The first one has been formed under the chairmanship of SBI Bank CEO Anukul Bhatnagar, in order to tackle together the problems seen in the banking sector so as to get exposed to opportunities equally.
There are allegations these days that banks are earning huge profits. However, the statistics say one gets only 16.89 rupees profit per 100 rupees investment, whereas it was over 24 rupees five years ago. The second committee has been formed under the chairmanship of Agriculture Development Bank CEO Anil Upadhyaya to study the difference between banks in south-Asia and Nepal.
Likewise, signing files with good intentions led an honest banker behind the bar due to the wrong practice of the Banking Offence Act. This has led people to fear these days in the banking sector. There should be action taken against guilty people as per the law. That is why; the third committee has been formed under the chairmanship of the Rastra Bank CEO Kiran Shrestha to conduct a study on the amendments required in present relevant laws and Acts.
Our objective is to make the banking sector even better. We are formulating our code of conduct that will be stronger than the Rastra Bank code of conduct. And we are working accordingly.
What challenges have you seen for banks in Nepal?
Banks are doing well, as per which, customers’ expectation is also understandable. A few days back, there were problems regarding ATMs that led to a loss of 1-2 crores in various banks. At present, the minimum capital of a bank in Nepal is 11 billion rupees, and ups and downs of few lacks and crores are not actually going to cause any bigger effect. These incidents will keep on happening one way or the other. However, this is not a panicking situation. But again, it should not be taken easily also. We must invest on to make our technology better and credible. The challenge for us is to clear the accusations on the banking sector, for which, we have formed a committee. It will work.
We have now reached almost all the rural areas. There are several challenges including networking, quality maintenance among others. Another challenge is Rastra Bank’s circular on the interest rate will reduce banks’ interest rates by 10-11 per cent from 14.77. If a bank gets weak, governance will too. This must be tackled.
But then, hasn’t a question been raised on the credibility of Information technology in Nepal’s banking sector?
We do not come to know much about news outside the country. ATMs hackings there take place in much bigger way. If we have shifted to click banking from big banking, we should definitely pay attention to its security. Every bank has ISO Information Security Officer. We should further strengthen the same.
Lastly, what are your plans?
I have done the needful, and that I will hand over the leadership in two years. I have worked as CEO for the last 6 years. The Bank is running in high speed. It has not even been eight years since we have become a commercial bank. However, we are best in CAMEL’s rating. We are competing with old banks and are not that behind. New things keep surfacing in life. Currently, IT must be taken care of a little more. We are trying to go to click banking from big banking.