PM Nepal urges banks to go to rural areas

Financial institutions should go to rural areas, said Prime Minister of the care-taker government Madhav Kumar Nepal here today inaugurating the 29th commercial bank of the country -- Commerz and Trust Bank Nepal.
"Urban-centri banks will widen the gap between rural and urban populace fuelling the conflict," he said, adding that the banks should serve the rural populace, who has no capital.
Banks should make their service charges and interest rates transparent, opined central bank governor Dr Yubraj Khatiwada.
"Banks should also increase their operational skill and efficiency to be more competitive," he said suggesting them to merge to become more competitive and efficient.
New banks should bring new dimensions as without development of the manufacturing sector, the financial institutions alone could not grow, he added.
The bank that has Rs 3 billion authorised capital and Rs 2 billion paid up capital has 360 promoters, who are from various background from Non-Resident Nepalis (NRNs) to farmers.
The bank will serve the rural populace through micro finance, said CEO of the youngest bank Anal Bhattarai. "We have planned to work with Winrock Internation to serve the ruralpopulace," he said, adding that it wil also distribute the solar home systems to the 80 households immediately.
The bank will float Rs 600 million of ordinary shares to the public, according to the central bank's directive.
Including Commerz and Trust Bank Nepal 29 commercial banks are in operation in the country, though the central bank has halted 'temporarily' to provide licence for the new commercial banks.
Apart from these 29 commercial banks, the country has 79 development banks, 79 finance companies, 16 NRB-licensed Cooperatives that are undertaking limited banking transactions, 45 NRB-licensed NGOs that are undertaking micro finance transactions and 25 insurance companies.