Rewanta Kumar Dahal is the Chief Executive Officer (CEO) of the Tourism Development Bank Limited (TDBL). Established about two years ago, the TDBL is now among the top development banks in Nepal. Dahal has been working as the CEO of the bank since Asadh 2066 B.S.
Born in 1969 in Gauradaha of the Jhapa district, Dahal has been involved in the banking and financial sector for the past many years. An MBA from the Tribhuvan University (TU), he worked as a lecturer at Nepal Commerce Campus and Global College of Management for some years. He is also the author of ‘Taxation in Nepal (Income Tax, Property Tax and VAT)’, a textbook approved by TU for BBS 3rd year.
The dynamic chief executive of the TDBL spoke to Ballav Dahal of The Rising Nepal on different issues, including the TDBL’s growth, its contributions to the country’s tourism sector and its plans. Excerpts:
How is the overall situation of the TDBL?
Since its inception, the bank has been successful in winning the hearts and minds of the people. Till the end of Chaitra 2068 B.S., the bank was able to collect about Rs. 1.56 billion as deposits and disbursed about Rs. 1.52 billion as loans.
The bank’s authorised capital is Rs. 1280 million, while its paid-up capital is Rs. 640 million. Of the total paid-up capital, promoters have contributed Rs. 400 million and the general people have a stake of the remaining Rs. 240 million. During the first nine months of the current fiscal year, the bank was able to make a total operating profit of Rs. 39.12 million.
We have also a good rate of return. Till the end of Chaitra 2068 B.S., the bank’s accumulated profit stood at Rs. 77 million. This shows that our annual rate of return stands at about 10 per cent.
How has the TDBL, as the first institution of its kind in Nepal, contributed to the development of the tourism sector?
Twenty-five per cent of our total investment goes to the tourism industry. I think, we have contributed significantly to the expansion of the country’s tourism sector. We have received very good response from the travel trade people.
Basically, we have invested in the hotel and restaurant business, travels and tours, trekking and mountaineering, rafting, handicrafts and other cottage industries.
After the bank has come into operation, we have financed about 70 per cent of the total tourist vehicles purchased in Kathmandu.
In addition, as a tourism bank, we have become the number one institution in terms of transactions and gains of foreign currency. Until the end of Chaitra 2068 B.S., the bank was able to earn Rs. 7.1 million from the foreign currency transactions. We buy foreign currencies and sell them through our counters, and to the Nepal Rastra Bank (NRB) and other banks.
We have also served the tourism sector through providing institutional bank guarantee to travel and trekking agencies and rafting companies and money changer firms. As we provide the bank guarantee service to the tourism-related firms and companies within one hour of receiving applications, they have been attracted towards us. It is a matter of pride for us that about 80 per cent of the total tourism-related companies have received the bank guarantee services from us.
We have accorded top priority to the tourism sector when it comes to loan disbursement. We charge 16.5 per cent interest from those who take loans for industrial and other non-tourism sectors. But we take only 15 per cent interest from the tourism enterprises. As we have tourism expertise, our loan services are easier and more efficient than that of others. Thus, we have received an overwhelming response from our customers.
What are the challenges facing your bank?
I have already mentioned that we have invested 25 per cent of our total investments in the tourism industry alone. Investing this chunk of capital in a single sector could be risky if the tourism sector faces one or the other kind of problems. Then, this might have a synergistic impact on us.
Nepal’s tourism industry was reeling under problems during the decade-long insurgency. However, the country’s tourism sector had not remained affected so adversely. Despite the closure of some four-star hotels in Kathmandu during that period, the hotel sector sustained.
But looking at the country’s present political scenario, we cannot rule out the possibility of the tourism sector facing difficulties. However, one of the peculiarities of tourism is that it is resilient. This sector can revive soon with an improved political condition.
Another challenge is that our industrial sector as a whole is also passing through an unfavourable condition because of political unrest in the country.
For achieving an economic sustainability, all sectors like tourism, trade and industry and banks and other financial institutions need to get sustained. As industries in the country are being closed due to longstanding political instability, the banking sector is facing a lending problem. Like other banks, it has also become difficult for us to increase our investments. However, we are confident that once there is peace and stability, investors will start approaching us for borrowing funds.
What are your institution’s plans?
We now are planning to develop our international relations. We are in the process of getting affiliated with internationally recognised banks and opening our accounts with them.
For providing our customers with the fund transfer facilities, we are going to get the SWIFT (Society for Worldwide Inter-bank Financial telecommunication) Code within one and a half months.
Apart from this, we are planning to expand our services to more tourism destinations in Nepal. We are going to open our branches at Sauraha of Chitwan district, Lumbini and Namche Bazaar in the near future. Until now, we have a total of 13 branches in operation. We have opened branches in Pokhara and Jomsom. We will explore more viable tourist areas for opening branches. Tourism entrepreneurs, tourists and the local people will benefit from our branches.
As a banker, how have you taken the country’s banking policies?
The guidelines and policies of the government are more banking sector-friendly now. The central bank has strengthened its monitoring and supervision activities. The NRB has also begun taking timely corrective actions against those violating laws.
In the past, the central bank’s guidelines and directives were not so strict. Because of that, many banks and financial institutions were in a difficult position.
I think, the NRB needs to enhance its supervision initiatives. Human resource crunch may be hindering its supervision.
How do you see the future of the Nepalese banking sector?
The banking sector cannot grow in isolation. It expands with the country’s economic growth and activities. All the banks need to maintain their corporate governance. As the banking sector is a transparent one, I see its bright future.
Finally, would you like to add anything more to this, please?
The remittance has made a remarkable contribution to our national economy with hundreds of thousands of Nepalis living and working abroad.
Many of them are working in the world’s top tourism destinations like Tokyo, Dubai and Kuala Lumpur. As they have some money and are familiar with new technologies, I would like to call upon them to return home and start the tourism business as Nepal holds a lot of tourism potential. We need not go abroad to look for jobs if we explore and utilise the vast tourism resources available in the country and market them properly.