Sunday, May 8, 2011

Standard Chartered Bank interested to acquire Nepali bank

Standard Chartered Bank is interested in acquiring financial institution in Nepal, however, it is waiting for the right time, according to a board director and ex-chief executive Sujit Mundul, who has seen Nepali financial sector's evolution since last eight years which he termed as eventful.
The recently retired chief executive, however, didnot elaborate on acquisition plan. "The big South Asian players will also be coming to Nepal once the country stabilises," he said, being hopeful of some kind of synergy to emerge that will promote convergence of thoughts for economic development.
Nepal has every thing that a country needs to grow economically strong despite the current political transition, Mundul said, adding that people will be investing in Nepal as there is huge potential in service sector and agriculture.
"The country is unstable and passing through turbulent phase but Nepal has right atmosphere and climate to develop itself as a medical tourism centre and educational tourism centre," he said, adding that international educational institutions could come to Nepal and offer non-academic courses like they have been offering in Singapore and Bangkok.
Similarly, the Nepal as an agrarian economy has a huge scope in floriculture as one can find a lots of varieties in Nepal and horticulture as the geography and climate is supportive, according to him. "Financial institutions especially microfinance institutions can help promote such small scale industries that can export apples of Jumla and oranges of various districts.
"Juice and pulp industries could be established in the regional level and exported to India," he suggested, adding that financial and non-financial institutions should chip in to help such industries that could propel growth.
However, Mundul, thinks that domestic financial sector is in 'ventilator' and it cannot support economic growth currently. "The central bank should be bold and take stringent action to clean up the mess in financial sector to make it able to contribute to the economy," he said, adding that the number of banks and financial institutions are still more in Nepal and there is no option to merger. "But transparency is the key to merger."
Similarly, the chief executive's pay and perks -- that has been the most debated issue in the banking sector -- should be linked to performance and should not be applied generally, without identifying what job family is a person in, according to him, who thinks skill and set qualifications must be linked to reward packages like pay and perks.
Though, he didnot disagree on the central bank's guideline for chief executive's pay and perks, that he hoped that "it could reduce gap between the high level official's pay and perks and low level's but it should not be stiff."
During his last eight years, he relived West Bengal's Naxlite movement in Nepal "but West Bengal has come a long way and Nepal will also come out of this phase," Mundul, who hails from Kolkata, said being nostalgic.
Even after retirement, he will be actively involved in Nepal operations as a board director and chairman of Risk Management Committee that makes him visit Nepal for 10 days a month, apart from his involvement in Kathmandu School of Management, writting, sketching, and his love for social service.

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