The much awaited handover of the management of Rastriya Banijya Bank (RBB), one of the country’s two most pioneering commercial banks, is in the process of management-handover. This had once seemed like a distant concept, but is now just round the corner.

Since the government had agreed to the management-handover of RBB by US based consultant firm Deloitte Touche Tohmatsu (DTT) on January 31 of 2002, there has been little progress. But recent developments indicate that the hand-over is likely to occur soon.

DTT might be taking over the executive office of RBB from June 3. “According to recent correspondence between DTT and the government, the US based firm will at least be taking the office of CEO on or before June 3,” said Rajan Singh Bhandari, head of the Banking Operation Department at Nepal Rastra Bank (NRB). He further mentioned that the present executive body would remain in office as board members without executive powers.

It has been 18 months since the government placed an advertisement in the September 2000 issue of British-published The Economist, calling for bids from international firms for management-lease of RBB and Nepal Bank Limited (NBL).

This time delay created an environment of uncertainty in the flow of loans from World Bank, including Poverty Reduction Growth Facility (PRGF) under International Monetary Fund (IMF) to RBB. It also left RBB employees uncertain as to what future they would have.

“We do not know how the upcoming management committee will treat us. There are speculations that a lot of employees will lose their jobs after the management-handover,” said an employee at the central office of RBB, requesting anonymity. Bhandari, however, assured that there is nothing much to worry about. “As far as we have assessed, the new committee will not be so hard on employees.”

When asked about such speculation and developments of the handover issue, acting chairman of RBB Khagendra Nath Sharma, told The Himalayan Times that since everything was being carried out by NRB and the Ministry of Finance, the management body of RBB could not comment on current developments.

The management-handover bid came from the government side came after research had been carried out by KPMG Barnet Group, an international auditing firm in 2000. The firm had studied two of the country’s pioneer commercial banks, RBB and NBL and had reported them to be technically insolvent. These two banks were running in loss due to ill-management and dubious loan-disbursals, which ultimately turned out to be bad loans.

According to the terms and conditions of the contract, DTT will take over RBB management by handing over US $ 5,799,790 to the government in lieu of its services for two years.