Nepali Times: You worked for Rastra Bank earlier. What's the transition been like?
Bhai Kajee Shrestha: My previous role in the central bank, as a regulator at the policy formulation level, helped me understand the workings of a commercial bank and made it easier for me to adapt here. For example, the central bank has many regulations with which we have to comply, and prior knowledge of those makes it easier.

How do you rate the Rastra Bank's supervision of private banks?
It's satisfactory, but they have to develop their capacity through staff training and improving their technical know-how.

How about your own employees?
We have orientation and on-the-job training for staff when they join us. We also regularly provide training courses for our staff within Nepal and abroad.

Seven years into operations, how are you doing?
Our customers must evaluate us. But if you ask me, we've been doing pretty well. We've only been in Kathmandu for two years, and we've grown by almost 150 percent. We started off as a regional bank in Pokhara and as of last week, we had a deposit of nine billion and loan advances of Rs 65 billion. Our non-performing assets are low in comparison with other banks, less than one percent.

What special features does Machhapuchchhre offer its customers?
Service. There are other attractions too, for example, our interest rates for deposits are slightly higher than those offered by first or second generation banks, but we mainly attract customers due to our attention to service. We now have 20,000 loyal customers.

Why do you think the banking sector is doing well, but not other industries? The past 12 years of conflict have definitely played a big role in weakening our economy but it's not as if industrial expansion hasn't taken place at all. Industry may have contributed less than expected to the national economy, but there has been development-why else would the demand for loans grow 20 percent annually.

So there's liquidity?
Yes, and remittances boost liquidity considerably. At our bank alone, we get an average of $200,000 a day through institutional and individual remittances. There are 17 other banks, some getting more remittances than us.

Still, people are not yet fully convinced by the ceasefire and the peace process. We are also waiting and watching, which is why banks are not in a hurry to invest in new projects.

How do you see the next few years playing out?
Once there is peace-and we are hopeful-we think the hydro sector can flourish. Hydropower is our priority and we are working on nine projects, of which five are already in operation.

There are now 18 commercial banks including Agricultural Development Bank and a few more are coming up. There are also donor banks, finance companies, INGOs, NGOs, postal saving banks. There is tough competition everywhere. We'll continue to focus on service and are shortly opening six more branches, in Kalimati, Gongabu, Gwarko, Damak, Itahari, and Baglung.