Citizens Bank begins operations

Citizens Bank begins operations
eKantipur.com, 20-April-2007

Citizens Bank International Ltd came into operation from Friday, becoming the 20th commercial bank in the country.

The bank offers home loan for a tenure of 25 years -- the longest duration of payment among financial institutions -- with interest rate ranging from 8 to 10.5 percent annually.

The new bank's other products include small and medium enterprise (SME) loan for up to five years at interest rate of 7.75 percent to 10 percent, and mortgage loan for up to 10 years with interest rate between 9 percent to 9.5 percent. Likewise, the bank has auto and education loan schemes. Finance Minister Dr Ram Sharan Mahat inaugurated the bank, which has begun its services with a slogan 'Your Partner for Progress'. Its paid-up capital totals 560 million rupees and its authorized capital stands at two billion rupees.

Speaking at the inauguration function, Mahat said that banks need to reverse their trend of confining their services to urban areas and urged them to expand into rural sectors. “Lots of opportunities are in the rural areas,” he said. Noting the importance of the financial sector for development, he said that the sector has to lead development efforts rather than becoming a follower. “The banks should focus on providing long-term finance to invest in infrastructure,” he said.

He noted that banks cannot sustain if they fail to provide quality services, are not professionally sound, and do not have a huge capital base.

Radhesh Pant, president of Nepal Bankers Association said vast number of people still do not have access to banking services. “The banking sector has grown faster than other sectors although its sustained growth remains a challenge,” he said.

Dr Shankar Sharma, chairman of the new bank, said the institution has strategies to enhance its financial intermediary efficiency to raise deposit rate and reduce lending rate.

“We are also attempting to contribute to reenergize the real sector,” he said. Rajan Singh Bhandari, chief executive officer of the bank, said it would strive to provide financial services targeted at giving a push to development.