Gopal Tiwari

Kathmandu, January 28:

In the context of Nepali banking industry, the issue of ‘quality management’ has become the most important factor for improving the performance of any bank. Given the scenario, the performance of Development Credit Bank Ltd (DCBL), which has brought it the ISO9001:2000 certification, is more than commendable. DCBL is the only bank in Nepal to get this quality certificate.

Credit for the progress and improved productivity of the bank goes to the management of DCBL that has only 0.29 per cent non-performing assets (NPAs), which is the lowest for any bank or financial institution in the country. On the occasion of the completion of four years’ of operations, Sudhir Khatri, president and CEO of DCBL, talking to The Himalayan Times, said that the bank is moving towards a system of universal banking concept to provide all sorts of loans related to housing, consumer segment, industry, construction, personal, venture capital, project financing, merchant banking, consortium financing at a competitive interest rate. According to Khatri, the bank’s success has also to do with the experienced employees of the bank.

The management is focusing to diversification of loans to help the bank grow in the long run, he said. Out of a total lending of Rs 1.40 billion, 28 per cent goes to industrial sector, 25 per cent to service sector, 25 per cent to house and land sector and the rest in the form of other small loans, said Khatri. The bank is going to focus more on housing and consumer loans from this current fiscal year, he informed.

Khatri said that the bank provides better interest rate of 4.5 per cent to its saving depositors and make available of ATM cards. “The lending rate of the bank ranges from eight per cent to 12 per cent depending on the type and nature of loans,” he informed. DCBL is the only privately-owned development bank at the national level, established under the 2050 Development Act which is entirely transparent. Deposits and borrowings of the bank have already crossed Rs 1.38 billion and Rs 150 million respectively, in the current fiscal year. It has a paid-up capital of Rs 160 million that is likely to be increased to Rs 320 million by 2007, as per the bank’s existing performance.

The bank does not have bad loans, added Khatri. “Very soon, the bank is going to issue 2:1 rights shares,” disclosed Khatri. The bank has registered Rs 50 million as operating profit in the fiscal year 2004-05 and has a target to reach over Rs 70 million in the coming fiscal 2005-06.

Giving a strong vision for future, the bank is determined to get registered under the Umbrella Act, promote mergers and acquisitions following Nepal’s accession to the World Trade Organisation. Dynamic management is essential for reaching the top in banking industry, Khatri said.