Kathmandu, January 23:

Once technically bankrupt, the state-owned Rastriya Banijya Bank (RBB), will be ready for privatisation within a year or two, says Bruce F Henderson, chief executive officer, RBB.

In an interview with The Himalayan Times on the eve of the 42nd anniversary of RBB, Henderson

shared his views on the changes the new management team has brought about in the bank.

“The bank has turned into a lucrative financial institution after four years of rigorous exercise, relating to reform in the bank. RBB has made significant progress during this period. From an almost a dead bank, it has become an awakened bank. We hope it will be ready for privatisation in a year or two,” says the confident-49 year-old alumnus of the New York University.

Furnishing details of the progress made so far, Henderson says RBB’s non-performing loans (NPL), that exceeded 70 per cent when new management took over some four years back, has been reduced to about 35 per cent now. “We hope to bring it further down to 25 to 26 per cent by the end of the current fiscal year and to about 10 to 15 per cent by January next year, when the management’s contract expires,” he adds.

According to him, the bank collected over Rs 10 billion in cash from defaulters and restructured loans worth Rs 2.5 billion during the period. The bank sold non-banking assets worth one billion rupees and increased the volume of its productive loan portfolio.

“The significant aspect of the new investment made during this period is that all loans disbursed during this period have less than one per cent NPA,” states Henderson.

Among other significant achievements, RBB has been able to increase the level of savings to about Rs 32 billion from Rs 21 billion in four years, while total deposits of the bank increased from Rs 39.4 billion to Rs 47.5 billion during the period.

In order to right-size human resources, RBB conducted three rounds of voluntary retirement schemes (VRS) and has reduced the number of staff from 5,528 to 3,214 in the last four years period, he adds.

On the human resources front, Henderson says that change in working culture and grooming positive attitude among employees has been a milestone, which will be crucial in running the bank efficiently in future.

“When we joined the bank, there was no specific job portfolio for employees. There were no promotions and raise for the last nine years. After the change in management, the bank raised pay and perks by up to 55 per cent during the last four years. We also revamped the system and allocated jobs and conducted scores of trainings,” he adds.

“Modernising RBB and introducing innovative products and services will be our continuing focus, apart from speeding up recovery of big loans,” shares Henderson. Issuance of debit cards, networking of majors branches with anywhere banking facility and computerisation will go on aggressively, he adds.

He, however, admits that the RBB management has not been able to make big wilful defaulters repay their loans. “In this case, the state machinery as well as judiciary should be cooperative and understand the seriousness of the issue,” adds Henderson.