RBB plans to up loans by 25 percent with focus on agriculture, hydro

KATHMANDU, AUG 13 -

State-owned Rastriya Banijya Bank (RBB) has planned to increase loans by 25 percent this fiscal year, with half of the increase going to agriculture and hydropower development. As the country’s largest bank, it has been lending

almost half of its total deposits for the last few years.

RBB has planned to expand its investments from Rs 40 to Rs 50 billion this year. “We will divide half of the increase between agriculture and hydropower,” said Krishna Prasad Sharma, CEO of RBB. By issuing credit worth Rs 5 billion each to these two sectors, RBB will be fulfilling its obligation to increase lending to them to 10 percent of its total lending as per Nepal Rastra Bank’s (NRB) directive. In the previous year, its credit issue grew by Rs 4 billion to Rs 40 billion.

With RBB lending through micro-finance institutions (MFIs) to meet its deprived sector lending requirement, it will now lend to the poor sections of society directly. “We have directed our 85 branches to lend Rs 770 million directly to the deprived sector,” said Sharma.

He added that direct lending by the bank will allow its customers to get loans at a relatively lower interest rate. “We hope

to provide them loans at 10-11 percent interest as they pay a far higher rate of interest while borrowing from MFIs,”

said Sharma. However, the bank will continue to lend through MFIs too.

RBB is also planning to lend under the Youth Self Employment Programme (YSEP) in 28 districts of the country. The largest bank is planning to receive Rs 1 billion from the Youth and Small Entrepreneur Self-Employment Fund. “We will soon be signing the agreement,” he said.

The bank also plans to start branchless banking this year. “Initially, we will launch this scheme in Chhatrebas of Kavre and Triveni of Nawalparasi,” said Sharma. According to him, each individual can deposit or withdraw up to Rs 15,000 under the branchless banking system.

Source: The Kathmandu Post