Govt will lower its stake in ADBL; Finance Minister

KATHMANDU, Jan 22: Finance Minister Shankar Prasad Koirala on Tuesday said banks and financial institutions (BFIs) should play a lead role in transforming the country´s import-based economy into a production-based economy.

Addressing a program organized to mark the 47th anniversary of Agricultural Development Bank Ltd (ADBL), Koirala urged state-owned banks to have competitive mentality. Saying that he has adopted zero-interference policy on state-owned banks, Koirala said the government would gradually lower its stake in ADBL and make it competitive and self-dependent.

Speaking at the program, Nepal Rastra Bank (NRB) Governor Yuba Raj Khatiwada said the government´s intervention on institution that it founded shouldn´t be taken otherwise. “The government has the responsibility toward depositors and tax payers. That is why it should keep vigil on the bank,” he added. Khatiwada also urged ADBL to extend loan in the agriculture sector at low interest rate.

Rajan Singh Bhandari, president of Nepal Bankers´ Association (NBA), said banking reform program would boost production, income, working efficiency as well as promote good governance in the banking sector. Likewise, Chairman of the ADBL Pramod Kumar Karki said that the bank plans to make its service more effective by reaching the peoples´ doorsteps.

Tej Bahadur Budhathoki, CEO of ADBL, said the bank has already started the process to bring a strategic partner. “The strategic partner will bring along capital, experienced workforce and new technology,” Budhathoki said, adding that everything will be finalized by September 2014.

The government holds 51 percent stake in ADBL. It plans to sell 30 percent shares to the national and international strategic partner.

The bank´s lending in the agriculture sector accounts for 30 percent of its total lending worth Rs 27.44 billion. ADBL operates with a paid-up capital of Rs 9.63 billion and authorized capital of Rs13 billion.

(Source: REPUBLICA)