Himalayan News Service

Kathmandu, January 19:

Bharat Mohan Adhikari, deputy prime minister and finance minister has urged the management of Agriculture Development Bank-Nepal (ADBN) to expand services in rural areas, since it already has a large network throughout the country. Addressing a programme today organised to mark the 38th anniversary of the bank, he said that the ADBN could play an instrumental role in brining changes in the agriculture sector and rural areas, where private banks and government institutions face difficulties due to the on-going conflict.

Adhikari praised the progress made by the bank at such a difficult time. He, however, stressed on the need of utilising the full capability of employees in order to get more productive results as compared to other private sector banks.

He also awarded ADBN employees who have completed 25 years of service with a long-term service medal on the occasion. Dr Tilak Rawal, governor Nepal Rastra Bank underscored that the ADBN should continue the reform and reengineering process in order to maintain a sound fiscal health. Although ADBN’s progress is not a complete accomplishment, the reforms are on the right track.

“The cut-throat competition in the banking sector invites continued efforts in reforms and reengineering. At such a difficult time, we should not rely only on survival strategy, but should put efforts to overcome it,” he said. “The ADBN is transforming itself into a modern financial institution, targeting to inject more capital in the agriculture sector and rural economic development,” said Bal Gopal Sigdel, chairman of ADBN, referring to registration of the bank according to Umbrella Act for banks and financial institutions.

The new act that came into force from the beginning of this fiscal year revoked the Agriculture Development Bank Act 2024 and all the financial institutions including commercial banks, development banks, finance companies and the Nepal Industrial Development Corporation are now governed by the act.

Sigdel also informed that the ADBN management has already initiated the necessary process for converting itself into a public limited company and introduce other reforms. “Following the successful transformation as per the new provision, the bank would kick-start all its services with a new vigour to alleviate poverty in rural hinterlands,” he said. Ram Chandra Maharjan, general manager, ADBN, said the bank has been acting as a pool to channelise urban capital to rural areas in the form of investment and loans. “Despite difficulties due to escalating violence, we have been injecting capital in rural areas from the deposits collected in urban areas,” he said. Stating that the situation has been reversed, he said, “We used to go to our clients’ place but now they have to come to us.” Although the situation is not favourable, ADBN plans to extend loans and investment equivalent to Rs 10 billion in this fiscal in agriculture sector and rural economy, whereas its recovery target is Rs 9 billion.

Established some 37 years ago, ADBN has so far given loans of about Rs 85 billion and recovered Rs 65 billion from rural economy and agriculture sector. The bank has collected deposits worth Rs 26 billion through its commercial banking operations and invested Rs 10 billion so far.

Maharjan also informed that reforms on six broad categories in the bank are underway with support from the Asian Development Bank’s Rural Finance Sector Development Cluster Programme. ADB has agreed to provide $65 million loan and $0.4 million technical assistance for the reform programmes.