Global IME, Himalayan get LoI to open liaison offices abroad

KATHMANDU, MAY 20 -

Global IME Bank and Himalayan Bank have received the letter of intent from the Nepal Rastra Bank (NRB) to open representative offices abroad, while NMB Bank is awaiting such an approval.

The central bank in January opened the door for commercial bank s to open liaison offices abroad. These three bank s sought the central bank ’s approval after conducting feasibility studies in the country they planned to go. Global IME and Himalayan have already started preparations to open their representative offices abroad.

Global IME has been given approval for opening liaison offices in Saudi Arabia, Qatar, UAE, Australia, South Korea and India, while Himalayan has been awarded the permission in principle for opening its office in Malaysia. NMB is also seeking approval for Malaysia.

Banks open such offices abroad in order to ease international trade, remittance, letter of credit and foreign investment transactions. “The offices will carry out transactions as allowed by the regulator of the countries concerned,” said an NRB official. “We cannot permit them for a specific jobs.”

Banks seeking to open liaison offices abroad have to first get permission from the central bank of country they plan to go. The NRB has fixed a deadline of six months to acquire approval from the host country’s central bank . Then, the NRB gives its final approval and the bank s have to open representative offices within six months after the NRB approval.

Earlier, a few joint venture bank s had opened such offices abroad as only joint-venture bank s were allowed to open liaison offices abroad. But the rule was relaxed to other bank s too in January.

“We have studied the market potential of the countries where we are going to open our representative offices,” said Global IME CEO Ratna Raj Bajracharya. “We are in the process of getting approval from the central bank of the host country.”

Global IME’s offices abroad will work in the areas of remittance and export/import, said Bajracharya, adding the bank also plans to help in bringing foreign investment in the country by maintaining relations with foreign business groups.

Similar is the plan of Himalayan Bank. CEO Ashoke Rana said remittance and easing international trade will be key tasks of Himalayan’s liaison offices. He said his bank has already applied to the Malaysian central bank for its approval of Himalayan’s business plan. “We will go to other countries gradually,” he added.

Criteria to be eligible to open such offices abroad are the bank should have met the minimum paid-up capital requirement, maintained extra buffer capital for one year, non-performing loans below five percent for three years. A bank would not be eligible to open its liaison offices abroad if any of its board members have been penalised by the central in the last six months.

Source: The Kathmandu Post