Rastriye banijye bank

Introduction:

Rastriya Banijya Bank (RBB) is fully government owned, and the largest commercial bank in
Nepal. RBB was established on January 23, 1966 (2022 Magh 10 BS) under the RBB Act. RBB
provides various banking services to a wide range of customers including banks, insurance
companies, industrial trading houses, airlines, hotels, and many other sectors.

RBB has Nepal's most extensive banking network with over 127 branches. Through its branch
network, RBB has been contributing to Nepal's economic development by providing banking
services throughout the country.

RBB has many correspondent arrangements with major international banks all over the world
that facilitate trade finance, bank-originated personal funds transfers and interbank funds transfer
via SWIFT. In a bid to promote remittance business, RBB works with Western Union and
International Money Express, two leading person-to-person funds transfer networks.

In addition RBB runs various programmes i.e. Banking with the Poor, Micro Credit project for
Women etc. to enhance the living standard of people as per the government directives.

As well, RBB actively delivers various government programs to people living in remote parts of
the country; these programs are intended to raise living standards.

Mission:
RBB is committed towards the satisfaction of its customers by providing modern banking
facilities. At the same time, the Bank is equally committed to the economic growth and
development of the country. The Bank aims to reach every rural and urban corner of Nepal to
accommodate the requirement of the people. The Bank's extensive branch network and
international connections are designed to transact banking activity between any part of the
country and any part of the world.

Source: http://en.wikipedia.org/wiki/Rastriya_Banijya_Bank

Brief History
Rastriya Banijya Bank (RBB) is the largest commercial bank in Nepal, fully owned by the
government and currently under a restructuring process. The bank was established in 1966 to
support economic growth and development in Nepal. Since then, the bank has developed and
diversified its role to provide various banking services to the community. It has been closely
associated with government programs targeting the priority and deprived sectors, while
undertaking innovative methodologies to finance self-help groups.
 
 
Methodology
Rastriya Banijya Bank provides various products and services in the form of deposits,
remittances, loans, merchant banking and bank guarantees. It has also been lending and investing
in rural areas, targeting low-income people under the deprived sector lending requirements. In
doing so, it has participated in several government rural credit initiatives including the Intensive
Banking Program. RBB has adopted a methodology of providing financial services through self-
help groups with the Banking with the Poor program, which focuses on combining its lending
practices with the social mobilisation of Self-Help Groups (SHGs) undertaken by NGOs. The
program targets poor women, formed into SHGs, who are encouraged to save first, and then
determine the interest on loans provided to their members. Unfortunately, the program has faced
serious difficulties, due to weak institutional support and insufficient dedication to the
program.  This has resulted in poor implementation and incapacity to transform the pilot project
into a viable program. However, some positive aspects of the banking with the poor program
includes the relative low cost of financial intermediation, in comparison to usual practices, and
the good overall participation of the population in the program
 
Area of Operations
In total, RBB has 117 branches that span across 68 districts. Regionally, RBB centers its
operations on Katmandu, Biratnagar, Birgunj, Butwal, and Nepalgunj.
 
Clients
RBB provides banking services to a large number of clients including banks, insurance
companies, industry trading houses, airlines, hotels and many other sectors in the economy. The
bank also provides financial services to the low-income population in rural areas, within the
framework of government programs, and seeks to promote economic development and the
improvement of living standards.
 
Active clients Active savers Active borrowers Gender
69,000* 1.2 million** - Individuals and institutions
*Active clients under the deprived sector lending program – 6,900 within the BWTP program
(as of January 2004)
**Active savers include individuals as well as institutions
 
Poverty Focus
RBB serves both urban and rural populations. In order to address poverty, RBB offers finance to
self-help groups (SHGs), which gather clients of its microfinance program. A series of specific
operating principles have been set as parameters for the operations of the groups. They are
encouraged to use peer pressure as collateral, to provide initial small size loans and to set their
own interest rates on loans. SHGs members are encouraged to save first before accessing credit.
 
Distinctive Features
The bank reaches out to both rural and urban households, institutions and corporations through
its vast network of branches. The bank aims to contribute to economic growth and development
of Nepal through a modern network of banking facilities. The bank has 60 branches in
mountainous regions, 51 in the Terai region and 21 in the Kathmandu region. Two thirds of the
branches are located in rural areas. RBB has the largest deposit base in Nepal with 1.2 million
depositors. Approximately 300,000 clients use the banking services for their business and
development activities.
 
Innovations
The bank launched its Banking with the Poor program as a pilot project in the early 1990s.  This
initiative, launched under the priority sector credit program, aimed at reaching the poor by
establishing linkages with self-help groups. Despite the difficulties in bringing the program to a
larger scale and a more profitable basis, there is considerable potential to transform it into a
successful methodology, using the example of the SHG-bank linkages in India.
 
Financial results
n/a
 
Loan Portfolio Portfolio at risk Savings Deposits OSS / FSS RoE / RoA
         
 
Challenges and Development Plans
RBB faced major difficulties in operating its ‘social’ financial intermediation in a profitable
manner. With pilots such as the Banking with the Poor program, the bank failed to ‘test,
standardise and replicate a program in an appropriate pace’ (see Sharma paper) and lacked a
planning process including: vision, outcomes, goals, and clear measurable outcomes. Along with
this, no clear review and knowledge management was carried out with regards to its financing of
the priority sector.
 
The bank has recently transformed its priority sector credit department into a ‘micro and small
enterprise division’ and produced a comprehensive manual on small enterprise lending by the
bank. The bank plans to undertake appropriate and thorough planning, testing and reviews to
implement microfinance program successfully in rural areas. It envisages collaboration with
microfinance institutions, while developing its own microfinance activities modelled on the
successful BRI Unit Desa system in Indonesia.
 
Inclusion in the Financial Sector
Rastriya Banijya Bank plays multiple roles as a: commercial bank, microfinance provider, and
investor in the microfinance sector. RBB holds shares in the five public-owned Grameen Bikas
banks, along with RMDC. However, as a government-owned body, its key priority is to act as a
commercial bank.
 
Himalayan bank limited

Himalayan Bank was established in 1993 in joint venture with Habib Bank Limited of Pakistan.
Despite the cut-throat competition in the Nepalese Banking sector, Himalayan Bank has been
able to maintain a lead in the primary banking activities- Loans and Deposits.

Legacy of Himalayan lives on in an institution that's known throughout Nepal for its innovative
approaches to merchandising and customer service. Products such as Premium Savings Account,
HBL Proprietary Card and Millionaire Deposit Scheme besides services such as ATMs and Tele-
banking were first introduced by HBL. Other financial institutions in the country have been
following our lead by introducing similar products and services. Therefore, we stand for the
innovations that we bring about in this country to help our Customers besides modernizing the
banking sector. With the highest deposit base and loan portfolio amongst private sector banks
and extending guarantees to correspondent banks covering exposure of other local banks under
our credit standing with foreign correspondent banks, we believe we obviously lead the banking
sector of Nepal. The most recent rating of HBL by Bankers’ Almanac as country’s number 1
Bank easily confirms our claim.

All Branches of HBL are integrated into Globus (developed by Temenos), the single Banking
software where the Bank has made substantial investments. This has helped the Bank provide
services like ‘Any Branch Banking Facility’, Internet Banking and SMS Banking. Living up to
the expectations and aspirations of the Customers and other stakeholders of being innovative,
HBL very recently introduced several new products and services. Millionaire Deposit Scheme,
Small Business Enterprises Loan, Pre-paid Visa Card, International Travel Quota Credit Card,
Consumer Finance through Credit Card and online TOEFL, SAT, IELTS, etc. fee payment
facility are some of the products and services. HBL also has a dedicated offsite ‘Disaster
Recovery Management System’. Looking at the number of Nepalese workers abroad and their
need for formal money transfer channel; HBL has developed exclusive and proprietary online
money transfer software- HimalRemitTM. By deputing our own staff with technical tie-ups with
local exchange houses and banks, in the Middle East and Gulf region, HBL is the biggest inward
remittance handling Bank in Nepal. All this only reflects that HBL has an outside-in rather than
inside-out approach where Customers’ needs and wants stand first.

HBL is not only a Bank, It is committed Corporate Citizen

Corporate Social Responsibility (CSR) holds one of the very important aspects of HBL. Being
one of the corporate citizens of the country, HBL has always promoted social activities. Many
activities that do a common good to the society have been undertaken by HBL in the past and
this happens as HBL on an ongoing basis. Significant portion of the sponsorship budget of the
Bank is committed towards activities that assist the society as large.

The Bank’s Vision:

Himalayan Bank Limited holds of a vision to become a Leading Bank of the country by
providing premium products and services to the customers, thus ensuring attractive and
substantial returns to the stakeholders of the Bank.
The Bank’s Mission:

The Bank’s mission is to become preferred provider of quality financial services in the country.
There are two components in the mission of the Bank; Preferred Provider andQuality
Financial Services; therefore we at HBL believe that the mission will be accomplished only by
satisfying these two important components with the Customer at focus. The Bank always strives
positioning itself in the hearts and minds of the customers.

The Bank’s Objective:

To become the Bank of first choice is the main objective of the Bank.

Product and services:

Himalayan Bank offers a wide range of deposit products that caters to your requirement. HBL
brings you the convenience of networked branches/ATMs and facility of E-channels like
Internet, and SMS Banking. In simple words, HBL brings banking at your doorstep.

1. Fixed Deposit

Fixed Deposits can be made for a period ranging from 3 Months to One Year or over. The
interest rate is tied up to the tenure of the deposit. Customers can borrow from the Bank against
their Fixed Deposit Certificates.

2. Savings Deposit

Savings Deposit Account can be opened in any of our Branch Offices. The minimum deposit to
be maintained by the Customer varies according to the Branch. Customers are provided with free
personal accidental death insurance. Customers opening this account get a free Cheque Book.
The Bank offers Any Branch Banking Facility.

3. Current Account

Mainly intended for business/corporate houses, this account can be opened from any of our
Branches and can be operated from any of Himalayan Bank Branch.

4. Premium Savings Account (PSA)

PSA is a privileged Savings Account with a host of convenient features and banking channels to
transact through. So now you can bank at your convenience, without the stress of waiting in
queues. PSA Customers enjoy a separate privileged counter and an interest rate calculated on
daily balance. PSA is first Premium Deposit Product in the Banking sector of Nepal.

5. Super Premium Savings Account (SPSA)

Super Premium Savings Account (SPSA) is a special deposit account designed for the premium
category of depositors. Special attractions of this account are:

 Yearly interest rate of 7% p.a.

 Minimum balance of Rs. 100,000.00
 Unlimited deposit and withdrawal facility
 50%** discount on all the banking services
 Accidental death insurance of upto Rs. 500,000.00
 Free SMS Banking Service
 Free Internet Banking Service
 Free Any Branch Banking Service (ABBS)

** Locker, Fund Transfer, TC, Draft, Statement, Cheque Book, Loan and Other Facilities

*Conditions Apply

6. Call Deposit

The Bank offers short-term term deposit in the form of Call Deposit. This is an interest bearing
Current Account or in other words Term Deposit with a tenure ranging from 7 days to 3 months.

7Bishesh Savings Account

'Bishesh Savings Account' is a deposit product targeted to special section of society which
includes minors, senior citizens completing the age of 50 years, physically challenged and
illiterate individuals. Special attraction of this account is reduced minimum balance of Rs.
2,000.00, increased interest rate 2.75% p.a. (with premium of 0.5% over the applicable interest
rate on Normal Savings Account), free debit card and accidental death insurance coverage for
maximum Rs. 0.5 million.

8. ecurring Savings Account

'Recurring Savings Account' is a 3 years fixed tenure savings account targeted to individuals who
would like to save funds in installments for future use. The special attractions of this account are
monthly deposit installments of Rs. 1,000.00 or multiple thereof, most attractive interest rate of
6.00% p.a. which is capitalized on monthly basis, accidental death insurance coverage for
maximum Rs. 0.5 million and availability of loan facility for value of 90% of the balance in the
account whenever required.

9. Jumbo Term Deposit

'Jumbo Term Deposit' is a fixed deposit targeted to individuals willing to deposit specified
amount for specified period of time for higher return. It is a fixed deposit product with two
options:
 1. Minimum Deposit amount of Rs. 7,463.00 for the fixed tenure of 3 years for return of Rs.
10,000.00 (less tax) at the end.

2. Minimum Deposit amount of Rs. 5,855.00 for the fixed tenure of 5 years for return of Rs.
10,000.00 (less tax) at the end.

Deposits can be made in multiple of the minimum deposit amount. The effective interest rate will
be 10% and 11% respectively.

Source: http://www.himalayanbank.com/contents/contents.php?PageID=introduction