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 Anil Keshary Shah, the CEO of Nabil Bank, is a known figure in Nepali banking. Excerpts of his interview with Arun Poudel on the prospects of Nepali banks and the national economy.

 Nepali banks are blamed of solely focusing on profits. How do you respond?

That’s the point I have been making for some time. And I really hope some­body will listen. That’s our mool prasna, the main issue. We need clarity on the role of the banks. I think time has come that we sit together—planning commission, finance ministry, Rastra Bank, FNCCI, CNI, develop­ment and commercial bankers’ associations, experts from the World Bank and ADB, and others—and find answer to just one question: “What is the role of the financial sector in Nepal’s economic development?”

On the one hand, we can say banks are like any other industry—you go out, make as much money as you can, and pay taxes. On the other, we can say—“No, the financial sector should be like the government. Forget the money. Like the big government banks, if you are in problem, billions in taxpayer money will be spent on recapitalizing you. Just give service, forget the profit. Under every tree, there should be a bank.”

Should it be either of these? Or should things be somewhere in the middle? Once we have clarity on this, we won’t be con­fused about the banks’ role, and we won’t have to question if we are doing the right thing.

Banks are considered expen­sive for loans, yet we seem to depend almost exclusively on them. Why is that?

In other countries large corporates go directly to the public and raise money by issuing bonds. People trust them. They thus don’t need to go to the banks. But that’s not the case in Nepal. Can our corporates do that? If not, then why? If we think banks are expensive, why not go directly to the public? But our corporates can’t do it, because there is lack of confidence. Do our corporates enjoy the same level of public confidence as the banks?

What opportunities do you see in the national economy?

Let’s first talk of the hurdles. We are already free of three major hurdles that trou­bled our economy for so long: power cuts for up to 18 hours a day, frequently changing governments, and everyday bandas and strikes. Now we don’t have load-shedding. There is a stable government in place. I don’t remember when we last had a banda or strike.

Now the choice is open to us. Let’s not look for three new hurdles and say we can­not take the economy forward. We need to look for areas where we have core com­petencies, through which we can actually develop the economy.

How can banks like Nabil contribute in this?

The financial sector is like the heart of the economy. We pump capital—the economy’s blood—to different parts of the country to make those parts strong. Nabil now has seven provincial divisions. Our provincial managers are constantly in talk with the pro­vincial chief ministers. Prosperity doesn’t come from Singha Durbar alone, but from the economic activities at the provincial levels. We are committed to look at each province separately, and we provide capital to the sectors they think of as appropriate.

You can give big speeches, but prosperity can only come if the government and pri­vate sector work together. And the financial sector works as the bridge between the two.

Where should the banks invest?

I think small to medium-sized enterprises (SMEs) form the economy’s backbone. They generate economic activities and employ­ment at all levels. There are large corporates also, but they are limited both in number and impact compared to SMEs. Suppose one kirana pasal (grocery shop) employs one or two persons. There are hundreds of thousands of kirana pasals all over Nepal. A momo shop may employ 3-4 people. Collec­tively, these small businesses employ more people than the large corporates. We are focusing on these SMEs. And our focus is also that these businesses enter the formal economy—register at PAN or VAT, file taxes— so that they don’t have to go to cooperatives or money lenders.

But it must be difficult to work with the SMEs, when they are still out of the for­mal economy.

It’s a big challenge to bring small busi­nesses into formal economy. But if we try to do too much too fast, it may not be good. We may scare away these businesses. They may be put off by taxes and other provi­sions, and turn to cooperatives and money lenders for loans. They may again descend into the informal economy. That is not good for them, or for the country. I think we need to go phase-wise here. People aren’t used to stringent rules and regulations about taxes. We cannot risk sending them back to the informal economy.

Why are banks investing so much in unproductive sectors like housing and auto?

Let us look at it differently. Most of us work hard to have a quality of life. Nobody wants to work hard only to add value to the economy and pay taxes. Everybody in the world wants to see their quality of life go up. In Nepal, there are certain perceptions about quality of life. We often think—“I would like to have my own house, instead of paying for rents all the time. I would like to take my family out on my own car or motorcycle. That’s my wish, that’s why I work so hard.”

How can you say such a feeling of wellbe­ing is productive or not? If one thinks it is unproductive, why should he or she work? What would they do with the money they earn? Should they just take it to the temple and offer it to the God, or to the govern­ment? If we only talk of productive sector, we can question tourism also. What does tourism actually do? Forget tourism, we should only be producing shoes.

But shouldn’t the focus be on the econo­my’s so-called real sectors?

I think we need to look at our economy’s core competence. Manufacturing is not one of them. We can never compete with India and China in large-scale production. For us, even large-scale producers do not generate as many jobs as the SMEs do. The SMEs directly benefit ordinary citizens, although they may not be employing 300 people all at once.

An indicator of prosperity is the welfare of a large number of people. Our prime minister has the vision of Happy Nepalis along with Prosperous Nepal. Making 10,000 people rich and the rest poor slaves doesn’t serve that objective. Instead of seeing a small group of people be super rich, wouldn’t it be great to raise living standards of a large num­ber of Nepali people? For that, the SMEs are the key. That’s why our bank is committed to serving the SMEs

 Nirvana Chaudhary, Managing Director of Nepal’s only billion-dol­lar conglomerate Chaudhary Group, talks about the group’s business plans and govern­ment’s role in promoting pri­vate sector in this conversation with Arun Poudel.

What are your current plans for investment expansion in Nepal?

At the moment, we are committed to taking forward the commitment we made at last year’s Investment Summit in Kathmandu. As we said at the summit, Chaudhary Group is working on four joint ventures: in solar power, logistics-park, mobile network service, and hydropower. We have already entered a JV agree­ment with Sharaf Group to develop a multi-model logistics park. Like­wise, there is a deal to develop 600MW solar photovoltaic proj­ect with the US-based Sky Power. Our plan is to take 200MW out of the 600MW to Province 2. We have almost completed our 18MW Middle Modi and started Super Madi 44MW project. We have been waiting for the government to respond to our approval request for the past three years. We were under the impres­sion that after witnessing the $250 million commitment from CG, the government would have acted in a fair and transparent way. But this has not happened.

What is the level of investment in these projects?

We and our partners will inject 50/50 percent funds into both the solar power and logistics park proj­ects. Sky Power will invest Rs 25 billion in the solar project. Sharaf Group will bring about Rs 6-7 billion in the logistics park.

There has been much hype about the telecom services that the CG has been planning. Could you enlighten us on this?

We want to offer telecom services at the most competi­tive rates. Right now, Nepal has extremely poor telecom services with sky-high rates. Why should people pay high charges for poor services? Our aim is to provide HD-quality voice calls and the fastest data package at the low­est price. Currently, the telecom charges in Nepal are possibly the highest in South Asia. Voice calls are way more expensive than they should be. And the charges for data are too much for ordi­nary people. We need to realize that telecom services and inter­net aren’t luxuries anymore, but rather necessities. Why have such high rates in Nepal? Data penetra­tion in the country is 60 percent and 4G penetration is not even 20 percent. This is a pure case of monopoly and it’s the people of Nepal who are suffering. This does not help in the creation of a digital economy, and the people are at the receiving end.

But the CG telecom project seems stuck. Why?

We have been trying to advance our telecom plan for the past three years, but maybe the government doesn’t want new players in this field. It has been holding our tele­com license for the past three years. We have no over-dues. We have fulfilled all the criteria, and there have been two cabinet deci­sions so far. Yet there have been many obstacles in the past three years in the implementation of those decisions.

At the Investment Summit, CG Communications announced an agreement with Istanbul-based Turkcell for 5G mobile network service in Nepal. CG is the sole investor in this project. We plan to invest Rs 25 billion, with Turkcell providing only strategic and tech­nical support.

What is your advice for up and coming entrepreneurs?

First, there is the need to iden­tify the right opportunity. Combin­ing right opportunity with right partnership can give you amazing results. Whatever the challenges, one should never give up. Focus on what you want to achieve.

Go outside Kathmandu Valley and see what the whole of Nepal needs. Try to tap the potential in the pro­vincial areas of Nepal. What can you offer to the people? Think not only in terms of making money, but also in terms of how you can come up with the best products and services. Business will come to you automati­cally if you have the right products, you develop the right channels, tar­get the right audience, and commu­nicate properly.

Learn from successful business­people from around the world, and replicate their success in our context whenever possible. But most impor­tantly, find your passion, use your creative capacity and imagination to build the future you want.

What should be the government’s role in promoting industries?

The existing concerns of investors need to be addressed first before the country can attract FDI. Nepal needs big investments. The govern­ment should implement commit­ments made at the Investment Sum­mit. Investors need a supportive environment to come forward. Big investors would like to see that their money won’t go to waste. Nepal Investment Board and concerned government agencies need to be serious and play the roles of facil­itators, not inhibitors, for inves­tors. The government needs to see that the projects proposed at the Summit under its own auspices are implemented.

How do you see the future of doing business in Nepal?

There is organic growth in all sec­tors of the economy. It is all due to market dynamics. So I see great prospects here. We only need an environment conducive to investing money and doing business. We need to see stable government policies that don’t change overnight. The private sector is always in need of a government that works as an honest and impartial guardian. 

 “In the beginner's mind there are many possibil­ities but in the expert's, there are few,” says Shunryu Suzuki in his 1970 master­piece Zen Mind, Beginner’s Mind. With his remarkably ordi­nary but penetrating wisdom put out in under 120 pages, the Zen master goes deep into the minds of the readers and enables them to have a very simple but profound perspective of living.

Anyone who has a begin­ner’s mind has the most beautiful mind. It is a mind with infinite possibilities. It does not have assump­tions. It does not belit­tle things and say—“Oh, I know it already. I have already accomplished that." Instead, it sees things anew each time.

You may be seeing your friends or kids for a hun­dred times, and each time your recognition of them may build on the memory of the last time you saw them. So you are not seeing them alone; you are seeing them as well as the memories that you have in the mind. And there are other impressions of the past that compound your vision.

It’s also the case with a new person or thing that we hav­en’t seen before. Oftentimes when we see them, we have a skeptic’s mind. As we aren’t familiar with them, we feel the need to be critical right from the beginning. So we see them as they are, plus our suspicions of them. While such seeing is sometimes helpful in protecting us, we miss the entire point most of the times.

What happens if we start seeing with a beginner’s mind—unclouded, unprej­udiced, and free from what we already know? What hap­pens when we put aside the ‘I’ and ‘know’ parts when seeing things? We see people and situations exactly as they are. We have a real appre­ciation of them. It widens our vision. It develops our wisdom. It enables us to do many things—understand things precisely, become better prepared to respond to situations, love people, develop compassion, con­serve environment, and keep ourselves out of trou­bles. In a sense, we can live fully.

In this space, I wish to dis­cuss things that resonate with our everyday lives, from a beginner’s perspective. If whatever I talk may sound familiar, I humbly ask the readers to try to see it with fresh eyes, discard the things that do not make sense, and if anything remains, let it remain.