MIN RATNA BAJRACHARYA
Nepali Times: What has been Punjab National Bank's experience in Nepal so far?
KC Chakrabarty: Our experience has been through Everest Bank. When we came into this particular arrangement – we invested and also provided management and technical support-Everest Bank's performance started improving and its share price went up. Its visibility has improved and, more than that, we are happy to be able to provide a large number of product services and banking technology to our customers at Everest Bank.
Where do you see the opportunities for growth for banks in Nepal?
There is a lot of room for improvement in infrastructure, and in agriculture a lot of things can be done. There are many Nepalis outside Nepal, so we can develop remittance products and also meet their requirements-especially small credit requirements-and what we call 'landholding' operations when people go abroad. For example, we now give educational loans to a large number of students who are going abroad to study. When there is economic growth, the scope is much greater.
How confident are you about the country's political stability?
All countries pass through these ups and downs. But I must congratulate the Nepali people for the way they have changed the system. It was a very peaceful transformation of power. I am quite hopeful that the new government will work for the welfare and development of the people because it is the people's own government.
You said there are opportunities in agriculture. What sort of opportunities are you talking about?
That is what local people in Everest Bank and policymakers have to decide. They should find out how banks, development agencies and farmers can work together and bring technology into farming. In Punjab we have done this in a big way. We create farming training centres and work with government departments to improve the cropping patterns to enhance farmers' productivity. But the basic thing is that your credit delivery system must suit the farmers.
How serious is the problem of non-performing loans in Nepal?
I think for Everest Bank we have no problem. Non-performing loans are due to a non-performing administration. All banks should know how to manage non-performing assets because that comes with the business. And we have given sufficient advice to Everest Bank on how to manage them.
The subprime mortgage crisis in the US recently rattled the banking sector there. Do you see any risk of a similar crisis happening here in Nepal?
I don't think so. That type of thing is not going to happen today in this part of the world because our economy is not that developed.
Where do you see Nepal's banking sector going in the next few years?
I would say the future of the world is in the East. China is developing, India is growing, and trade relations between them are improving. And Nepal is in between the two of them, so I think Nepal will also benefit.
A lot of young people have emigrated from Nepal. How is that an advantage?
It will give them a better education and improve their skills. It will not happen if they are going there just to do manual jobs, but if you can educate them they can get three times more salary.
You said Punjab National Bank has been working with farmers to enhance agricultural productivity. How can local banks do that here?
Agricultural development cannot happen just through the work of banks. A development administration has to provide some support for irrigation facilities, good quality seed, good quality fertilizers, the land development effort. Small farmers cannot do it all on their own. If the government is not ready to do that then it must involve the private sector if the need be.