Saturday, June 29, 2019

23 local units lack banks

Some 23 local units are still devoid of a bank branch despite the central bank dictate to establish a branch of commercial banks in each of the 753 local bodies.
Commercial banks have opened their branch offices in 730 local units as of now, out of the total 753 units, according to the central bank.
Though it has been over two years since the country went into a federal structure, there are still 23 local bodies without commercial banks that can work as treasury of the local governments. As each of these local governments has their own consolidated fund, a branch of commercial bank is needed to operate such fund, according to the central bank. In the absence of the bank branch, local unit officials have to travel to far-away district headquarters for bank-related works. 
While the 28 commercial banks have divided the local units, themselves, for establishing branches two years ago, bankers said that lack of basic infrastructure including buildings, internet connectivity, road, electricity and security have delayed in reaching all the local bodies across the country, though the local governments have shown their commitment to help banks in setting up their branches.
The central bank has offered various incentives and facilities to encourage banks to open their branch in line with the government’s policy to have presence of commercial bank in each local unit. The central bank also provides interest-free loan of Rs 10 million per branch for one year to those banks establishing branches in the designated local levels. Likewise, the banks will also enjoy their monopoly in the local units where they reach first.