21st commercial bank comes into operation

Finance Minister Dr Ram Sharan Mahat inaugurated Prime Commercial Bank Ltd, the 21st commercial bank in the capital on 28 September.
“Banks should extend their services to rural areas,” Mahat said adding that in proportion to increasing number of banks, the economy is not expanded and only finance sector is attracting more investment currently. “If it continues, it may not be sustained,” he said.
Speaking on the occasion, Krishna Bahadur Manandhar, acting governor of the Nepal Rastra Bank (NRB) said thatnew banks are coming as per government’s policy.Given the size of economy and the low gross domestic production (GDP), experts claim that the banks are overcrowded.
“But in the open market policy they cannot be stopped,” Manandhar said adding that those who cannot compete in the free market will close down.Prime Commercial bank has more than 359 promoters from different walks of life.Its authorised capital is Rs 1.5 billion, issue capital one billion rupees and paid up capital is700 million. It has the largest paid up capital among the commercial banks.
Narayan Das Manandhar, a seasoned banker and chief executive officer (CEO) of the bank said that Prime bank is the first bank which has largest paid up capital.
“We are bringing some more innovative banking products and services to offer to our clients soon,” he said announcing the starting of its services of ATMs, Internet banking, SMS banking and evening counter from today.
Narendra Bajracharya, chairman of the bank, on the occasion said that Prime is committed to prudential banking norms, financial transparency and good corporate governance.
“We are planning to invest on hydro, agro, infrastructure, road, communication-based industries,” Bajracharya said adding that it will bring some new packages for the SMEs also.
“Due to lack of opportunity for big investment, Nepali banks are concentrating on retail lending only,” Radhesh Pant, managing director of Bank of Kathmandu and president of Nepal Bankers’ Association said adding that after 2010, foreign banks will come to Nepal and local banks have to compete with them.
“Thus local banks should build competitiveness in skilled manpower, modern technology and they should be efficient in management,” he added.
The banks that have professional management team have registered tremendous growth. Thus professional management of banks is a key to compete with the foreign banks.