NMB Bank has been awarded the ‘Bank of the Year Nepal’ title for four of the past five years. Most recently, the bank won the ‘The Bank of the Year Asia 2021’ from The Banker magazine, London.

The latter award is regarded as the industry standard for assessing banks across the globe and recognizing the world’s leading institutions. NMB is the first-ever Nepali bank to get this award since its commencement in 2000.

Pratik Ghimire of ApEx talked to Sudesh Upadhyaya, deputy CEO of NMB Bank, on the bank’s achievements and the prevailing market challenges.

Let’s start with ‘The Bank of the Year Asia’ award. How did that happen?

After 2015, we consistently prioritized three pillars: sustainable banking, digital transformation, and corporate governance. This is the main reason we became the best in Asia. Sustainable banking means we invest in environment-friendly companies by valuing our social responsibilities. We prefer sectors that help communities rather than a few individuals.

We are the frontrunners in terms of many new practices in the Nepali banking sector. For instance, we were the first bank to launch the ‘Omnichannel’ system under which KYC can be processed through video and certain operations can be performed using a messenger, and so on. With Omnichannel, any customer can apply for a loan online, and it will be issued (if the documents are correct) without printing any paper. These are examples of our digital transformation.

We strictly adhere to corporate governance. We treat all stakeholder, shareholder, customer, staff, and other bank-related companies and individuals as equals. On many occasions, our bank has compromised on profit to make people happy.

What is the driving force behind your recent success?

The greatest motivation comes from an appreciation of our work. Thankfully, our stakeholders, shareholders, customers, and others love, enjoy, and most importantly, trust our work. 

What are the core values of your bank?

Integrity, compliance with regulations, customer focus, teamwork, and innovation are our core values, and these things guide, bind, and drive us on the path of success. These values, we believe, are fundamental to defining not only who we are, but also what we do and in what manner we serve.

NMB is a founding member of the Global Alliance for Banking on Values. What are its benefits?

I talked about practicing new systems of sustainable banking, digital transformation, and corporate governance. These values come from the alliance, as this is a team that works to improve the norms, ethics, values, and responsibilities. We learn from international banks and other Nepali banks follow our lead. 

Also read: Daraz: Revolutionizing e-commerce in Nepal 

Now let’s move to market challenges. Nepal Rastra Bank has increased the capital of commercial banks to Rs 8 billion, and most of the banks are overcapitalized.

NRB increased the mandatory figure from Rs 2 billion to 8 billion, which compelled commercial banks to compete. So, they gave lower returns to investors as they were overcapitalized. But, with time, the banks are getting stronger and more stable and they will return their fair share.

The central bank has also intervened on fixed deposit rates. How will it affect the banks?

Again, due to competition, banks had to increase interest on fixed deposits. But after the NRB introduced the protocols, banks were obligated to follow. A few months ago, we had witnessed malpractices, but everything is under control and running smoothly right now.

How do you fight the liquidity crisis?

We are in touch with international brands and because of our policies and goodwill, we have their trust. We can get liquidity from outside the country as well. Similarly, we, along with other banks, are working to convince Nepalis abroad to send money home because remittance, the major source of liquidity, is lower than in the previous years. There have been rumors they send money through illegal channels, so we are working on ways to help them start sending money through formal channels.