Anil Shah is Chief Operating Officer and head of the consumer banking operations of Standard Chartered Bank. Nepali Times spoke to him about the bank's recent efforts to sell consumer loans, and its long-term outlook on doing business in Nepal.
Nepali Times: Your bank has begun to aggressively market different consumer finance products, including home loans. Does that mean you're running out of other investment options?
Anil Shah: We are starting a new chapter in our approach to banking by enhancing service delivery to customers, and that explains the new products and services. We have launched "Xtra Banking" at our Kantipath branch. It will now be open 365 days a year, and banking hours there have been extended up to 7PM on weekdays and from 9:30 AM to 12:30 PM on weekends and holidays. We've also added four more ATM machines, which brings us up to nine. On the asset side, we have launched the home loans, to complement auto loans and credit cards. All this has been done to further enhance the customer's experience of banking with us.
Other banks also offer these loans, why should they come especially to Standard Chartered?
That is correct, other banks offer the same products, but there are some features of ours that benefit the customers more. For instance, our credit card is a true credit card-at the end of the month you have a choice of paying just 5 percent of the total amount outstanding in your account, or the entire outstanding amount or any amount within that range. This gives customers flexibility in payments. Our auto loans have an interest of 11 percent, which along with the five-year loan tenure and up to 80 percent financing we provide, also provides the customer maximum flexibility. Our home loans stand far above similar products in the market-you get 10 percent interest, repayment within 15 years, loan amounts ranging from Rs 300,000 to Rs 7.5 million and financing of up to 70 percent. It isn't enough for us to just be part of the market, it is essential for us to be leaders in every product and service that we provide. Our dedication to customer service was recently recognised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), which awarded us a Commendation for Customer Satisfaction and Relationship.
What is behind your recent push in consumer banking, rather than traditional corporate banking?
Globally, the Standard Chartered Bank views consumer banking as a major contributor to overall revenues. In keeping with, and taking into consideration, our local market, we are stressing consumer banking here too. If you look at the banking industry today, you will quickly realise that in the corporate arena there are many banks and limited customers. Add to this the fact that the number of corporates is increasing at only a marginal rate, and you realise that the potential for growth is limited. Even though the consumer banking side is far less developed, it still offers many opportunities, all of which we are looking at. With our international experience and range of products and services in consumer banking, we have the unique advantage of knowing how to pick those that would be most suitable to meet our customers needs. With this focus on consumer banking the individual consumer will get access to an array of financial products, which until recently were not available in our market.
One of the first joint venture banks to set up shop in Nepal has already divested. Does that weigh on your mind?
The SCB essentially focuses on emerging-markets-we have operations in 50 countries in Africa, Middle East, South and East Asia. We understand the intricacies of emerging markets and have tested policies and procedures that take the conditions in these markets into account. Nepal is an emerging market and therefore poses both the challenges and opportunities that are inherent in such markets. Our commitment to Nepal can be determined by the fact that we have 13 points of representation in the country already and the fact that we are upgrading our entire hardware, network and software platforms. We're investing over Rs 330 million in this project, which is surely an indication about the bank's view about doing business here. Yes we have economic problems and most definitely all institutions will have to tighten their belts and keep a very close eye on cost lines to get through these trying times. But for us emerging markets are our home and we are here to stay.
How would you explain the contribution a bank like the SCB can make to the Nepali economy?
This is a question that we get asked often. We look at our contribution from the point of view of our stakeholders-shareholders, customers, regulators and staff. In the case of shareholders, if an investor had purchased 100 shares during the initial issue in 1987, it would have cost him Rs 6,000. Today he would have 675 shares worth Rs 1,012,500 (at a share price of Rs 1,500), in addition to which he'd also have received dividends of Rs 2,42,650. I think that type of return on investment is exceptional anywhere.
From the point of view of the customer, we look at the fact that we have helped bring international standard banking products and procedures to Nepal. In international trade we have provided our customers the opportunity to give their customers, in turn, the confidence of dealing with a recognised global bank. We have provided about 40,000 depositors with a greater level of service, security and satisfaction. Besides we also pay taxes to the exchequer and for the last seven years have consistently been amongst the highest taxpayers in the country, a fact that was recognised by the government recently. In addition to this we have always taken pride in the recognition that we receive from the Nepal Rastra Bank for the high international standards that we bring to the market in terms of compliance, customer service and operational and credit risk management. In employment terms, our bank is a preferred employer, because we have a performance-oriented culture. Simply put, if you perform you will be rewarded.