September 1, 2019 | DWAIPAYAN REGMI
There always lies a question about which one is better – Private firms or Government ones? On an honest note, private firms are way forward in a large number of sectors. With liberalization and economic freedom around, private firms are being able to grab the market and have been able to prove their capability with taking over in various sectors in comparison to Government firms.
However, the case is entirely different in the banking scene. Although it seems that Private Banks have been in the lead through the basic surface – Government banks have been able to prove themselves in a really impressive manner. Once at worst state, these Government Banks (Rastriya Banijya Bank, Agriculture Development Bank, and Nepal Bank) are taking lead through various sections. The following are key factors that stay into consideration.
Rastriya Banijya Bank and Agriculture Development Bank have been a key leader in banking sectors in the previous fiscal year of 2075/76 with an impressive profit of 5.33 Arba and Agricultural Development Bank of 4.35 Arba respectively. They not only took the lead but proved that Government Banks have dedication and strength to stand out of the market at any pace of time.
Although NIC Asia seems to be moving with aggression with rapid branch expansion, still the number of branches of Agriculture Development Bank is in the limelight and within the lead. It can be stated that Government banks are committed towards financial access – ensuring services from every remote corner. In the meantime, Rastriya Banijya Bank is the only bank that has been the bank to establish branches in all 77 districts of Nepal.
Government Banks have been bringing new staffs through Lok Sewa, with an entire range of transparency within. The stories of employee turn over is less in these Government banks. Meanwhile, the expenses that banks makeover their staff proves it all – Rastriya Banijya Bank alone spent 3.12 Arba and Agriculture Development Bank spent 2.91 Arba for their staffs in the previous fiscal year.
As far as the base rate is concerned, Rastriya Banijya Bank stood alone with 5.5% of the base rate. Although Standard Chartered Bank took the second position, there is Nepal Bank again in third making a 7.98% base rate. This rate has a huge influence on the interest that banks charge over loans. Government banks are therefore able to provide lower interest rates.
Paid Up Capital and Reserve Fund
Agriculture Development is the bank with the highest paid-up capital in the industry making 14.45 Arba. This is an impressive sum in the banking industry as a whole. Again, when it comes to reserve, Nepal Bank is in the lead with 19.63 Arba of Reserve and Rastriya Banijya Bank in the second with 14.54 Arba.
Be it an individual, or a firm – they are ready to line up in Government banks for loans and advances because of the reliability over their interest rates. Government banks are the ones who have been offering the best interest rates to the market as of now.
Corporate Social Responsibility
The award that Rastriya Bainjya Bank got from Asia Money in terms of ‘Best Bank for CSR’ proves it all that Government banks are not just profit concerned but are equally concerned in delivering service and caring for the people around.
It is agreeable that there are a lot of spaces that Government Banks need to work out, but checking out the basic factors, Government banks seem to be leading. Maybe, Government banks have not yet come up with attractive schemes, have been away from the huge promotion but they are getting innovative gradually. Didn’t Rastriya Banijya Bank make the digital opening of 14 branches all together?