Govt to divest shares in four rural dev banks

KATHMANDU, May 26: The government has decided to sell off its shares in four rural development banks in a bid to ensure greater ownership of local people in these financial institutions.



A recent meeting of Privatization Committee - that undertakes the privatization process of Public Enterprises (PEs) -- took the decision to sell off its stakes in Purbanchal Rural Development Bank, Pashchimanchal Rural Development Bank, Madhya Pashchimanchal Rural Development Bank and Sudur Pashchimanchal Rural Development Bank to local co-operatives. The government holds 8 to 16 percent stake in these institutions. The government has already sold off its stake in Madhyamanchhal Rural Development Bank to illegal network marketing operator Unity Life International. [break]



Hari Roka, one of the members of the committee, told myrepublica.com on Tuesday that they had decided to divest shares of four rural development banks to local co-operatives selected through open biddings.



“Once the shares are divested, local co-operatives that have minority stakes in these banks can enjoy majority and hence take decision in favor of local people,” Roka added.



Roka, who is also the member of Finance and Labor Relation committee of the parliament, said the decision was aimed at ending government´s intervention in the banks and empowering local communities.



Apart from the government, other financial institutions like Rastriya Banijya Bank, Nepal Bank Ltd, Agriculture Development Bank Ltd and Nabil Bank, among others also have stakes in those banks.



Roka said the money that the government gets by selling off its shares would be utilized for the greater interest of local communities, unlike in the past when such amount used to directly go to the state coffer.



Meanwhile, the meeting has formed a sub-committee led by Roka to recommend measures to deal with the issues on PEs and suggest modality for their privatization. The decision was on the basis of a report prepared by the Privatization Unit under the Finance Ministry.



Nepal Rastra Bank (NRB) Governor Dr Yuva Raj Khatiwada, member of National Planning Commission Pushkar Bajracharya, Revenue Secretary Krishna Hari Baskota and Tanka Mani Sharma, joint secretary at Public Enterprises Coordination Division under the Finance Ministry, are the other members of the sub-committee.



The sub-committee will also recommend ways to properly utilize the money that the government will get after selling off its shares in PEs, Roka said.

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