Double jeopardy in banking

The very long honeymoon period that the banks and financial institutions had enjoyed is finally coming to an end. This does not necessarily mean a crisis; rather it is a wakeup call to the industry. The growth that they experienced in the past decade will no longer be sustainable. The ones who adhere to the change will survive and possibly do better, but I feel a process of filtration in the banking industry has already commenced. Today our economy is on a free fall, and we don’t know at what velocity it will hit the ground.[break]



Nepali banks and financial institutions need to further consolidate and strengthen their foundation to leverage future growth. I can speak of the bank I represent, Ace Development Bank Ltd, and we are boosting our capability to penetrate markets, improving customer services, expanding product offerings, streamlining costs, and investing in talents.



The Nepali financial market has so far been very resilient, and had till now avoided the severe impacts of the international credit crisis. The double jeopardy we face here is that we have had consecutively apathetic governments that have not seen the importance of the economy to address the severity that we are facing today.



For the first time in our history, our balance of payments has gone negative. Should the macro economics continue in the state of neglect, the banking sector can only be a mute spectator to the impending disaster. But, in the mean time, we can continue in our professional manner by maintaining our good asset quality and good governance.



Siddhant Raj Pandey is the Chief Executive Officer of Ace Development Bank Limited.

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