ADB-Nepal undergoes restructuring

Himalayan News Service

Kathmandu, February 14:

The restructuring process currently underway in the Agriculture Development Bank (ADB)/Nepal would help it expand its rural services, said top-level officials of the bank.

The bank is known as people’s bank, serving all class of people and has 268 branches across the country.

Talking to The Himalayan Times, Ramchandra Maharjan, chief executive officer of the bank said, “The bank is undergoing an effective restructuring process in an attempt to improve service delivery and improve its financial sustainability.”

Maharjan disclosed that the Asian Development Bank (ADB) has already given a grant of Rs 50 million under technical assistance (TA) to make the restructuring process more vibrant and beneficial, under which various studies are being carried out.

The bank, that has the largest network across the country, is mainly concentrating its activities on improving the livelihood of poor farmers, including people who are in need of bank’s services, said Maharjan.

Under the restructuring process, three components are being taken care of, namely financial restructuring, organisational restructuring and staff restructuring, revealed Maharjan.

According to him, according to financial restructuring norms, the ADB-N has to work under Nepal Rastra Bank’s (NRB) prudential norms and improve in preparing financial statements and identify areas for meeting capital deficiency of the bank. Maharajn said that under organisational restructuring, the bank will discontinue its practice of opening offices without studying their viability. From now on, the bank will cut unnecessary expenses, remove duplications and remove structural lacuna, he added. Under the head of staff restructuring, the bank has already reduced its 340 staff through voluntary retirement scheme on which about Rs 200 million has been spent, informed Maharjan. “The bank is also undergoing vigorous review of past policies, making them compatible in the present context,” he said.

Other reform initiatives taken by the bank are on re-training 700 staff in Nepal on lending, accounting system, risk management, internal audit, planning, Information technology, etc.

The three-year long restructuring programme of the bank is hoped to bring financial improvement making the bank stronger. Asian Development Bank’s experts are also working in the bank to improve accounting, planning, auditing system, while analysing loan portfolio system, management and information system Talking about the impact of Maoist insurgency, he said, “We have been successful in running 100 banks at district headquarters. According to Maharjan, the bank has also started commercial banking activities due to increased demand from consumers and is emerging as a modern bank serving the poorest of the poor in the country. Total deposits of the bank has crossed Rs 26 billion, according to bank’ record.

The ADB-N also known as ‘rural bank’ has social responsibility, according to the bank’s report. Lending of the bank under rural loan portfolio comes to Rs 81 billion, whereas it has already collected Rs 61 billion. Outstanding loans to be recovered from the invested sectors are Rs 20 billion. The bank has invested in small farmers development programmes, irrigation and other projects. It has a total of 5,00,000 borrowers and 600,000 depositors.