The country at present is in the grip of the second wave of the coronavirus and the number of infections has been increasing on a daily basis. To break this chain of infection the government has imposed a prohibitory order from April 29 and will last for 15 days. NepalNews spoke to Anil Keshary Shah, Chief Executive Officer of Nabil Bank, to learn how such orders affect the banking sector in Nepal and how we could overcome the existing problems. Excerpt:
In general, how do these lockdowns affect the banking sector in Nepal?
From a health and safety point of view these lockdowns are much needed to keep the pandemic in control. Being an essential service banks continue to provide financial services to our customers. So the health and safety of our staff and the customers who come to our premises is of paramount importance. Therefore we try and encourage customers to complete their banking transactions digitally as far as possible. Along with this during lockdowns we have to be extra vigilant to monitor the status of our customers, particularly our loan customers to ensure that they are managing and coping with the impact of the lockdown on their businesses to the best of their abilities.
BFIs have been allowed to open but do you feel it is apt when people cannot move around due to vehicular movement being curtailed?
As I said above banking is an essential industry and we have to remain open to provide services to our customers. Just think from the time of the first lockdown till now while only a relatively small percentage of the population has had to go to a hospital, a vast majority of the population has had to come to the bank to avail of the services we provide. When people need to avail of a banking service they find a way to come to the bank, but we are trying to provide a maximum of institutional and individual services digitally so that everyone can bank safely from their home.
The previous lockdown did not seem to have affected the banking sector as reports show that profits of banks have increased. With literally no economic activity taking place how is this possible?
First of all you cannot say that there has been no economic activity, everyone has continued to purchase essential food and other items and many other economic activities have continued. It has been a tough time for everyone including banks and while the profit numbers may look large, in comparison to last year and the revenue that would have been generated if times were normal there is a contraction. Let us not forget that banking is the one sector that has given a series of concessions from reduced interest rates, to restructuring and rescheduling loan repayments to help our customers. In fact, I don’t know of any other private, public or governmental sector that has provided the type of relief that the financial sector has. And because of the high quality of professionals that work in the banking industry even through all the effects of the pandemic the depositors’ funds have always been secure and they have got their interest on time.
Many borrowers faced a harrowing time paying back loans and interests due the previous lockdown. The lockdown was lifted yet many people still did not have any source of income. What could be done to overcome such problems as people take loans because they are employed but all of a sudden they are out of a job?
Most banks have taken these hardships into consideration and pushed back repayments in many cases. Not only the repayment of the principal amounts due but even interest payments have been deferred. We understand that in the long term we will only survive if now in these hard times we help our customers survive. From the feedback I am getting businesses are facing a more harrowing time paying rent, employee salaries, utility bills and taxes than bank loans. So I suggest that along with banks all other stakeholders also start to chip in and give some comprehensive relief to those affected personally or institutionally by this pandemic. Banks and banking alone cannot give enough reprieve to pull our nation’s economy out of this.
What would you suggest that the government could do in the long-term to get the economy moving when we face such unforeseen calamities?
I suggest that the government at the earliest form a high-level task force with all the economic stakeholders, from the National Planning Commission to all the ministries involved with the economy, to the private sector associations like FNCCI, CNI, Nepal Chamber, NBA, HAN etc and formulate an Economic Master Plan to not only rebuild our economy, but utilise this opportunity to Build Back Better.
Looking at the rising number of infections the current prohibitory order seems necessary. However, there are people who are saying that if the government had taken necessary precautions earlier then we wouldn’t have reached this stage. What do you have to say?
The question is not what we could have or should have done in the past, the question is what do we need to do now to contain the crisis and come out of the current wave. I strongly believe that instead of blaming the government or anyone else each of us individually needs to take the responsibility of staying safe by wearing a mask, maintaining social distance and washing/sanitising our hands. If each of us individually stays safe collectively we will all be safe, this is the only way for us to overcome this pandemic.
