Everest Bank welcomes Punjab National Bank’s CEO Mr. Sunil Mehta to his Maiden official visit to Nepal

Sun, Mar 10, 2019 11:22 AM on Corporate, Latest,

Everest Bank, the JV Bank between Nepalese investors and Punjab National Bank of India, has welcomed Mr. Sunil Mehta, the Managing Director and Chief Executive Officer of Punjab National Bank (PNB) to Nepal on his maiden official visit.

Today, PNB is the second largest Bank in India. PNB has business of more than 10.84 lac crores with more than 7000 Branches and 9000 ATMs.  PNB has a wide network of 14 training centres across India, including training facility in Information Technology.

  1. Everest Bank Limited (EBL) established 25 years ago joined hands with PNB as a Joint Venture Partner.

EBL has now 92 Branches and has served its customers well.  The customer base of EBL exceeds 10 lacs, one of the highest in the country. 

EBL now has Regional Offices (Mini Head Offices) already established and operational in all the seven Provinces as follows:

Province

Name of the Town

 

1

Biratnagar

2

Birganj

3

Kathmandu

4

Pokhra

5

Butwal

6

Surkhet

7

Dhangadi

 

The purpose is that the Branches and the Regional Offices can take many decisions without referring the matter to Head Office for quicker decision and actions.

EBL has been paying to its dedicated Staff and Officers – perhaps the best remuneration in the country and among all the Banks.

  1. Similarly, EBL has been serving its Shareholders handsomely.  The total investment from a Shareholder, amounting to Rs.13500 from the beginning till now, has multiplied more than 25 times and present value of these Shares amounts to almost Rs.3,45,800.  Details are given in the Annexure attached herewith.
  1. Today, Nepal is suffering from lack of adequate investment in manufacturing and employment generation.  Manufacturing gives multiplication of not less than four.  In other words, for every single person appointed in a manufacturing company, results in further employment of not less than four people in – (a) ancillaries, (b) transportation etc.  
  1. The country’s attention, according to us, should be to attract established companies of India to set up Manufacturing Plants in Nepal. 

 Firstly, there is a very handsome and attractive tax advantages as follows :-

      a. The Manufacturing Plant in Nepal with market in India, does not have to pay         Indian Corporate Tax, which amounts to 34% on the Profits.

      b. Further, the Plant in Nepal does not have to pay India’s GST (Goods and Services Tax).  GST in India is at least 12% on Food Articles and 18% in case of Motorcycles or its parts.

One may wonder why Indian Companies are not coming to Nepal inspite of such attractions.

The reasons, according to us, is that :-

       a. Firstly, this is not widely promoted and not known to Indian manufacturers.

       b. Secondly, the persons in Authority in Nepal do not seem to be aware that to attract investment in North East India, the Government of India gives not only the tax advantage but, even Capital Investment and Transport subsidies.

For example, if you set up a Plant in Sikkim, you will get – (i) 10 year Income Tax holiday, and (ii) Capital and Transport subsidies.

In Nepal, you get 5 years Income Tax holiday (compared to 10 years in Sikkim), if the Promoter Investment is not less than NRs.100 crores.

  1. The present Labour Laws of Nepal bothers the potential investors.  For example, the Industrial Labourers are not just Coolies, they are mostly Machine Operators, Quality Control Staff as well as persons trained to do maintenance of Machines. 

Presently, to employ Indians in Nepal, you have to get the approval of Labour Ministry.  This should be changed, so that the local Authorities (such as CDOs) can issue Work Permit for limited periods to such Indian workers. 

The present Labour Law allows the Unions to put their demands every two years.  This is very bothersome.  This should be increased to at least five years, or such period as the Union and the Management may agree.

  1. Nepal should further have Industrial Estates at strategic locations, such as Nepal Ganj, which is just north of Lucknow – Kanpur Industrial Complex.  

India has more than 30 States.  Some of them much bigger, both in size and population, like, Uttar Pradesh, Madhya Pradesh, Maharashtra etc.  However, for Nepal, India means North Indian States bordering Nepal, such as, Bengal, Bihar, Uttar Pradesh and Uttarakhand.

To be near to Industrial / Commercial Complex is important for new Industries.  For example, such centres will have transportation hub.  An industry quite often requires raw materials / packing materials to be brought from various parts of India and Finished Goods have to be similarly transported to all over India.  Hence, transport hub is important.  In North India, after the Kolkata Industrial Complex, the first Industrial Complex is Lucknow / Kanpur.  Thereafter comes Delhi with Gurgaon / Faridabad/ Ghaziabad / Noida etc. 

If you have ready to move Industrial spaces, the potential investors in India would be more ready rather than trying to locate a good location and then start from procuring the land. 

In an Industrial Estate, there can be common facilities for the workers –

  1. First-aid and Medical facilities.
  2. Telephone and other IT facilities
  3. Central stand-by Power generation etc.
  4. Fire protection
  5. Treatment of waste water and materials

At present, EBL in association with PNB, has been providing following services to its customers :-

a. Indo-Nepal Remittance Service

Under this, real-time fund transfer facility is being provided to Nepalese migrant workers to facilitate their income back home.  The facility is available through all 7000+ branch locations of PNB and more than 8000+ business correspondents.  Remitters having account with PNB can even process their remittance payment through internet banking portal and mobile application of the Bank.  Remitters maintaining account with other Banks in India can also process Indo Nepal remittance through PNB by depositing cheque of their account maintained with other Banks.

b. Cross Country ATM Service

Under this facility, the ATM card of EBL can be used in all the ATMs of PNB in India and the ATM card of PNB can be used in all the ATMs of EBL in Nepal.  This service has facilitated tourists, business persons and individuals who frequently travel Nepal or India by providing hassle free services.  Also, this facilitates thousands of Nepalese students studying in India as they can  use EBL’s ATM cards in any of the PNB ATM, so that their guardians do not have to remit money every month.

c. Saving product with multiple features to facilitate Nepal Domicile Indian Gorkha Soldier

EBL and PNB has launched a saving product to facilitate Nepal Domicile Indian Gorkha Soldiers where a twin / linked account will be opened on both PNB and EBL with free remittances service between the accounts.  The saving account will serve as salary account and pension account after the retirement.  The soldiers will be issued Co-branded Debit Cards of PNB and EBL which will facilitate easy cash withdrawl in both countries without any service charges.  Soldiers will also be eligible for housing loans, pension loans and other loans at concessional rates and service charges.

     7. Everest Bank Ltd. is also doing which we consider “ valuable work” in the area of CSR (Corporate Social Responsibility). We are concentrating on the following two areas:

 7.1 – Crematorium:

The present method of burning the dead bodies among the Hindu requires wood and the modern crematorium is designed whereby saving of wood is 60%. Saving of wood is saving of tree which we consider very important, especially in hilly country like Nepal. We are starting this modern crematorium at the following places, to begin with

  1. Pashupatinath, Kathmandu
  2. Shankhamul at Patan
  3. Pokhara
  4. Bhairahawa

We intend to gradually start this in all parts of Nepal especially where we have branches.

7.2 Bathrooms in Schools:

Many schools – both government and private do not have proper water facility and bathrooms. This is not only unhygienic but also health hazard. The children have to be taught proper hygiene habit from the school days. Hence we are offering this facility to all important schools where we have branches. To begin with, we did this last year at Baneshwor. Baneshwor school is one of the oldest in Kathmandu Valley and runs in two shifts. The staff as well as the students were happy.

Nepal Rastra Bank has asked all the Banks to spend 1% of their profit for such CSR. If all the Banks contribute the same in various important fields instead of waiting for the Government to do, it will be excellent. We have started doing our part.

However, the expenses for such CSR work is not allowed to be deducted as part of business expenses by Income Tax Department and we have taken the issue with the Finance Ministry. The Finance Ministry has noted the issue and the same is likely to be considered in the next Budget Speech so that all the Banks can provide socially beneficial work.

Annexure

Investment Analysis of EBL Shares on taking Base Amount as Rs.1000

 

S.No.

Particular

Amount (Rs.)

 

1.

Total Investment

 

a.    Initial Investment (10 Nos.@ Rs.100 per share)

b.    1:1 Right Issue

c.    3:1 Right Share

 

 

 

1000

1000

11500

 

 

Total Investment

 

13500

2.

Return on Investment

 

a.    Cash Dividend received till date

 

b.    Total Shares received till date

Bonus Shares                   – 477 Nos.

Right Shares                     – 125 Nos.

 

Total (Bonus + Right)         - 602 Nos.

 

c.    Market Price for 602 number of Shares as on 27.02.2018 was Rs.507/- per share

 

 

 

 

35495

 

 

 

 

 

 

 

305214

 

 

Total Return on the Investment

 

340709

 

Note – After deduction of initial investment of Rs.13500 net benefit becomes Rs.327209.