ADBL not in interest rate battle

Agriculture Development Bank Ltd (ADBL) will not involve in an interest rate battle, said bank chief executive officer Shyam Singh Pandey on the eve of ADBL's 43th anniversary. The bank will complete 42 years of service on Thursday.

The financial sector is in a battle to win deposit after the sector faced liquidity crisis in the recent past.
Banks and financial institution are offering attractive interest rates on deposit. Deposit in savings is attracting up to 9 per cent interest which is double what it was last year while interest on fixed deposit is 1.5-2.5 per cent higher.

We will not involve in the battle, at least in the agriculture sector, Pandey said adding that the agriculture sector lending will not be more than 12 per cent after the new increment. However, he did not elaborate the date of interest revision. "Agriculture is our priority sector," he said. ADBL has adopted the strategy to promote commercial agriculture diverting from supporting livelihood agriculture to small farmers.

ADBL has low lending rates compared to other commercial and development banks. "We have a social responsibility and we can't ignore it," he said, "But it will not reduce the competitiveness of the bank." The state-owned public bank is planning to issue shares to the public as soon as it gets permission from Securities Board of Nepal (Sebon).

"Preparations are ready for an initial public offering (IPO)," Pandey said.
ADBL is opening IPO of Rs 960 million -- the largest in the country's history -30 per cent of its Rs 3.2 billion capital. ADBL has 241 branches including 94 banking offices throughout the country.

ADBL significantly increased its financial performance in the recent past.

Its bad loan decreased to 9.71 per cent in the fiscal year 2008-09 while net profit increased to Rs 1.72 billion.

The bank has Rs 35.16 billion deposit while lending and investment is Rs 38.30 billion.