‘Open bank account’ campaign encouraging: Bankers

Prime Minister KP Sharma Oli Sunday inaugurated the ‘Open Bank Account’ campaign of the government in cooperation with Nepal Bankers’ Association (NBA) in order to enhance the access of all people into the banking system. The campaign aims at opening bank accounts of every Nepali citizen in commercial banks.
The campaign was launched as per the budgetary programme of the government for the current fiscal year 2018/19. Under the campaign, 28 commercial banks will cooperate to open accounts of every Nepali citizen in their bank at zero balance. The banks have also agreed to provide Rs. 100 in each account opened under the campaign as per their corporate social responsibility (CSR).
In this context, the Gorkhapatra Corporation organised ‘Gorkhapatra Sambad’, a weekly interaction with the bankers about the campaign and its challenges at the same time over the various issues of the banking sector. Excerpts:bank sambad


Campaign supports local levels

Kiran Kumar Shrestha
Chief Executive Officer, Rastriya Banijjya Bank Limited

With the announcement of the national campaign ‘Open Bank Account’, the government has started to walk with the private sector banks, which has increased trust between them. We are feeling encouraged with the new campaign as the government has considered banks and financial institutions (BFIs) an important partner in the national prosperity campaign. But BFIs have challenges to extend banking services in remote areas. It is difficult to keep human resources there, operation cost is high and there are problems in networking and security. Therefore, the government should announce incentives such as discount in tax and capital adequacy. If security and incentives are provided, we are ready even to provide mobile banking services to remote villages.
BFIs are working to enhance the financial literacy among the masses. But in order to make the national campaign a successful one, we need to promote access to the BFIs, support of the local bodies and greater digitalisation. Use of technology will simplify the things. When people can open their bank account from their home or offices and make most of the transactions instantly in a cashless manner through digital device, they will be motivated to use it. Use of technology must be promoted if we have to attract the youth to the banks.
Similarly, the government should include the class ‘B’, ‘C’ and ‘D’ - development bank, finance companies and microfinance banks respectively, in its banking definition and allow them to go to the local levels. Currently, only class ‘A’ commercial banks are allowed to mobilise the government funds which limits other BFIs to take risk to expand their services to the remote villages where there are less economic activities.
Banking is the most transparent and most regulated business sector in the country. BFIs don’t cheat their customers as they have to be transparent in their every activity. It is also not true that we earn a huge profit while mobilise deposits at a very low interest rate. We have to follow the Nepal Rastra Bank guidelines to maintain the spread rate below 5 per cent. Many commercial banks with above Rs. 8 billion paid-up capital are earning Rs. 500 million to Rs 2 billion in profits which is normal.
Recently, BFIs are facing growing operational and technological risks. Use of digital technology has promoted the use of banking services and speeded up the transactions but at the same time it has created threats of data and money theft, hacking and fund embezzlements.
Banking sector regulator, NRB, has strictly introduced the ‘Know Your Customer (KYC)’ provision which scared some people. But we must understand that it was for the good of the country and the banking institution since the country has promised to implement anti-money laundering provisions and there will be an international audit of Nepal’s efforts in discouraging money-laundering. 


Campaign promotes transparency  


Bhoj Bahadur Shah, chairman of Mega Bank

The government has forwarded Nepal Bankers’ Association (NBA) in the ‘Open Bank Account’ campaign with very catchy slogan. The mindset of the people should be changed for the effective implementation of the campaign. Still today, millions of people make transaction of their business from outside the banking system. This campaign helps bring such activities in to the banking system and promote transparency, therefore, it is appropriate. Opening of bank account only does not lead to the prosperity. It should be utilised effectively. Banks are providing Rs. 100 to every people opening account in their banks under the campaign. Rs. 100 is important for those in whose account it goes. It should go to the people which do not have banking access.
Opening bank accounts of all Nepali citizens by the banks alone is not possible. The government should also facilitate banks in opening accounts by motivating people into the campaign. Distribution of elderly allowance in every ward is not easy task. The government should manage security and other managerial parts for this.
For the implementation of the policy, the people handling the government and the bureaucracy should first accept banking system from their level. For attracting people into the banking transactions, the government authorities should first be ready to accept banking instruments, including cheque in its transaction and gradually should promote the cashless transaction.
Opening bank account is not sufficient. It should be utilized effectively. We cannot really open the account of every Nepali citizent as 100 per cent efficiency is not possible even for a machine. If we become able to open account of additional 10 per cent people in a year, it may be regarded as our success. For this, the government should enhance banking literacy by introducing it in the curriculum of school level courses. More than 6,000,000 children are in school level education, we can motivate them for the banking transaction and saving through banking literacy campaign. Local bodies should also focus on job creation in productive sector for the utilization of the bank accounts opened under the campaign.
Policy of banks to meet the increased in minimum paid up capital requirement through the issue of right shares created problems of liquidity in the financial sector. Delay in government expenditure under capital budget is also supporting for liquidity problem in banking sector. The government should find the ways to enhance its budget spending capability. 


Exciting campaign 


Keshav Bahadur Rayamajhi, Chairman Janata Bank

We have been talking about economic prosperity, and financial transaction is directly linked with prosperity. Banks are now opening their branches in local levels. Private banks have also cooperating with the prosperity campaign by opening their branches in the local levels. Although it is said that the government activities should be carried through the government banks, the government decision to involve the private banks in the ‘open bank account’ has excited us.
Locals are happy to get banking sector within their access. The government’s campaign is challenging, but if private banks and government bank coordinate together it will be beneficial for both the people and banks. The banks can help achieve the goal of prosperity
We are excited as the ‘open bank account’ campaign launched by the government is attainable in the sense that both the private and government banks are joining hands for the purpose. However, it is not an easy work. In the remote villages, there is no required infrastructure. There is problem of security, cost, and lack of employers, and networking. Our employees do not want to stay in remote villages. In stead, they want to quit job. Thus government should provide incentives to the private banks. Government must encourage and motivate the banks to carry on the economic transactions at the wards of local levels despite such barriers.
The deposit collected from the local levels would be invested in the local levels. However, if there are not areas for the investment, the collected deposits can be diverted.
Money is obviously movable. Opening Bank Account and Its use
The campaign must encourage the promotion of cashless economic transaction and use of cheque. Every sector must use the banking channel to handle economic transaction. However, there is need to change the mindset. The government offices should be ready to receive cheque, not cash. This will motivate people to use the banking channel.
But opening account alone will not work if the people do not use the account. For example in Rasuwa Rs. 30, 000 bank accounts which were opened earlier are now in doormat. The local levels must encourage and motivate the citizens for the use of cheque for transaction. Motivating factor is a must to generate banking awareness among the locals. It needs time. It is challenging.
Bank Merging
Banking sector is the most transparent and well managed sector. The state is not mobilising it properly. Merging in the banking sector has increased the capacity of investment. For example the banks are now capable of investing in 100 kw hydropower projects on their own. Earlier, they used to invest only for 10-15mw power projects. on its own. 



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