Seven banks preparing for separate Visa membership
KATHMANDU, OCT 05 -
Seven commercial banks have decided to take separate membership of Visa—the global card payment solution company—to reduce their cost while doing transactions as an associate member of Visa.
Sunrise Bank, Global Bank, Machhapuchhre Bank, NIC Bank, NMB Bank, Nepal Bangladesh Bank and Everest Bank are preparing to establish a joint company, which will be a member of the Visa, with equal stake. The banks will then pay membership fee to Visa equally. Currently, Standard Chartered Bank Nepal, Nabil Bank, Nepal Investment Bank Limited (NIBL) and Himalayan Bank Limited (HBL) are the principle members of the Visa. Most of other banks, are currently availing the card facility as associate members of Visa through Nabil, NIBL and HBL. The affiliated member banks pay the Visa charges to the three principal member banks.
“We have estimated that each bank will see reduction of initial cost in card business by Rs 10 million to Rs 15 million in our capital investment,” said Surendra Man Pradhan, chief executive officer of Sunrise Bank. “The initiative was taken as banks are paying more as affiliated members of Visa.”
Sunrise is taking the lead for separate membership for the network of seven banks, which have planned to sign a memorandum of understanding shortly.
With their separate membership, they will be in a position to affiliate other banks with their network by charging necessary fee.
Nepal Bangladesh Bank CEO Gyanendra Dhungana said that although the seven banks were taking initiative for a separate membership of Visa, they have opened door for other banks as well to join the group. “Other banks having no stake in the soon to be formed company can affiliate with us by paying certain charge,” he added.
Everest Bank said that it joined hands with other banks to take membership of Visa as they are preparing to issue credit card soon. “It is necessary to become member of Visa to issue international credit card,” said P.K. Mohapatra, CEO of Everest Bank.
Banks concerned said that preparation for taking membership is still at the initial stage. “It will take at least another three months to see that materialised,” said Mohapatra.
A total of 2.9 million people in Nepal hold debit cards issued by different banks and financial institutions, while there are 29,130 credit card holders as of third quarter of last fiscal year, according to Nepal Rastra Bank.
Source: The Kathmandu Post
