Development Banks Want Bigger Pie Slice

Development banks want a bigger role in the financial market. "The central bank should ensure our representation in Credit Information Bureau (CIB)," said Development Bankers' Association president and CEO of Malika Bikas Bank Jhapat Bohara, adding that development banks also want to be part of Central Depository Company, Banking Training Institute and Clearing House.

The Central Depository Company being established for modernisation of domestic capital market will have 50 per cent share of Nepse, 10 per cent share of CIB, 15 per cent of CIT and 25 percent of a group of six commercial banks -- Standard Chartered Bank, Nabil Bank, Nepal SBI Bank, Bank of Kathmandu, Nepal Investment Bank and NIC Bank -- as promoters. Bohara urged the Nepal Bankers Association (NBA) to give development banks also a chance to be part of it.

NBA -- along with Nepal Rastra Bank (NRB) and other financial institutions -has established Nepal Clearing House Ltd that will commence Automatic Check Truncation and Clearing Systems to be evolved into a nation-wide payments system. It has 60 per cent share of NBA, 15 per cent of SCT, 10 per cent share of NRB and the remaining share is planned to be distributed between development banks and finance compnaies.

NBA -- with the help of NRB and Rural Microfinace Development Centre (RMDC) and other financial institutions -- has also planned National Banking Training Institute (NBTI).

The training institute has a support base of $2 million from Asian Development Bank (ADB).

"It will be developed as a self-sustainable institute that will be run by a professional CEO," said Nepal Rastra Bank (NRB) deputy governor Bir Bikram Rayamajhi, inaugurating the one-day seminar on `Corporate Good Governance in Banks and Financial Institutions' organised by Development Bankers Association here yesterday.

Giving his presentation on Corporate Good Governance in Banks and FIs, Kumari Bank chief executive officer Radhesh Pant said that lack of good corporate governance will result in collapse of banks and financial institutions.

"Good corporate governance will increase depositors' trust, thus raising premium, Price to Earning (PE) ratio and share price of institutions as a whole," he said adding that corporate good governance will increase access to finance, spruce up brand image and help mobilise funds.