Mashreq Bank, one of the leading financial institutions of the UAE, recently celebrated the 10th anniversary of its representative office in Nepal. The representative office of the bank came into operation on November 7, 2010, and is led by Hema Kumari Adhikari, chief country representative for the bank. Sangay Sherpa from The Himalayan Times caught up with James Pearson, executive vice-president, global head of FI and NBFI-CI- BG of Mashreq Bank, who is visiting Nepal on the occasion, to discuss his insights on the country's banking and financial sector and the bank's plans for the Nepali market. Excerpts:

Can you share Mashreq's strategies for Nepal?

We would like to develop broader relationships with our existing clients in the coming days. At present, banks are facing strains and pressures brought on by the war in Europe, COVID-19, and the inflation surge. Such factors have created challenges for the bank's customers and ultimately for the banks themselves.

We hope to support our banking customers by providing liquidity and lending support, among other solutions. Our business has witnessed sizeable growth and I expect Mashreq to continue growing here.

Please share your observations on the Nepali financial market and the bank's experience and contribution to the Nepali banking sector.

The banking and the financial market in Nepal has faced many challenges in the past few years, making the institutions and the regulator stronger and more adaptable.

I would describe the market as resilient and our partners have been excellent for Mashreq as we continue to expand our business here in the country.

Our experience in Nepal has been remarkably good, but we are still quite young in this market. This is our 13th year of operation and due to our excellent team in the country, I think we have made a very cautious beginning. Mashreq strives to become a meaningful partner in the markets we operate. Being so, I would like us to develop deeper relationships with multiple banks here and provide more products and solutions to them.

We want to grow our trade finance and lending business in Nepal and become a significant supporter of the banks and the central bank as well.

What are the challenges and opportunities you see in the aftermath of the pandemic and the ongoing Russia-Ukraine war?

The economic challenges faced globally at present are a first of their kind and that is the biggest challenge in itself. Predicting the future and making plans for operating government fiscal and monetary policy is extremely difficult. During our meeting with the central bank, it was very clear that these are new crises and I don't think that anyone has all of the answers when it comes to policies.

However, I believe the Nepal Rastra Bank (NRB) has done very well in terms of listening to its customers and strengthening its relationships with key partners while also developing an open banking system and welcoming foreign and international banks like Mashreq.

Increasing interest rates globally, including in Nepal, have been challenging for the business fraternity in the recent months. Please share views and suggestions to handle the situation.

Nepal has a young population, and people here are used to money being relatively inexpensive and having low-interest rates. However, interest rates have typically been higher in the past and we have found that economies adapt to such rising interest rates.

The government, the bankers' association, and other consumer organisations have a role to play in terms of providing financial education to people in a country like Nepal. Many people have bank accounts, e-wallets, and access to loans, but they need to be educated on how to deal with the increased cost of money, rising interest rates, and inflation, which raise challenges for consumers.

I hope the government can encourage the rapid reopening of the tourism economy. The more people visit Nepal, the more friends this country will have alongside a growing economy as tourism is a vital provider of liquidity to the banking system and the local economy.

Has the NRB's decision to bar representative offices of foreign banks from engaging in banking transactions in Nepal affected Mashreq's plans in the country?

The NRB's policy for representative offices of foreign banks has not affected Mashreq's plans for Nepal.

We feel that the central bank has been rather supportive and encouraging. We need to evaluate what more we can do in this market and whether the representative office is the most effective structure for us to do business here.

As I said, Mashreq is very focused on ensuring that we stand relevant and effective. We have an open relationship with the NRB and they have been very clear about what they want us to do.

Do you have any key impressions to share from your visit?

Nepal is a beautiful country. It is a country with a resilient banking system and hardworking people. Nepalis are very curious in a good way and always want to ask questions. They want to find out about what brings people to Nepal and that is a sign of a country that is always looking for improvements to make and grow stronger.

A version of this article appears in the print on November 10, 2022 of The Himalayan Times.