KATHMANDU, Jan 23: Rastriya Banijya Bank Ltd (RBBL) is planning to open branch offices in India and China within the next fiscal year.
Kiran Kumar Shrestha, CEO of the state-owned bank, said that the RBBL started preparations for the same after the bank's board, two months ago, directed the management to work toward opening branches in China and India.
Some private sector banks already have their liaison offices abroad. But, the RBBL is planning to open full-fledged branches in China and India, Shrestha added.
RBBL will first open a branch office in India. According to Shrestha, the bank has already set up study team to recommend necessary requirements for opening a branch office in India. "Our plan is to open a branch office in India within the current fiscal year and in China by the end of the next fiscal year,” Shrestha added.
India and China are Nepal's largest trading partners covering almost 90 percent of the country's total trade. According to the central bank, Nepal exported Rs 744.2 million worth of merchandise to China, whereas imported Rs 53.19 billion worth of goods in the first five months of the current fiscal year. Likewise, the country exported Rs 17.01 billion and imported Rs 250.36 billion worth of products to India in the review period.
Though some banks have Indian partners, talk to open joint venture bank with Chinese investment has not materialized yet which has made trade with China difficult.
While trade with India faces mostly bureaucratic hassles, trade with the northern neighbor is more complicated due to lack of official financial channel for payment. Some traders claim that they have to pay by hundi, unofficial remittance transfer instrument, due to lack of banking institutions in each other's country.
Nepal Rastra Bank (NRB) had, in 2009, allowed international banks to open their branches in Nepal for wholesale banking starting January 1, 2010, in line with the provisions of World Trade Organization (WTO) membership. Likewise, the NRB, in 2013, allowed commercial banks to open liaison/representative offices abroad.
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Rastriya Banijya Bank Ltd (RBBL) CEO Kiran Kumar Shrestha has said that the bank was restarting the long-stalled process of going public.
The fully government-owned bank RBB had floated the plan to go public some years ago. But the plan fell on the backburner due to frequent changes in the government.
The bank has again claimed that it will float shares to the public like other banks.
According to the central bank diktat, banks and financial institutions must float 30 percent of their shares to general public. However, the ideological differences among political parties have delayed the decision as some parties are of the view that there should be one fully government-owned bank in the country.
