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NRB cuts commercial banks’ commission
KATHMANDU, AUG 08 -
Nepal Rastra Bank (NRB) has substantially cut down the commission it provides to commercial banks involved in government’s transactions from the current fiscal year. The NRB said the facilities enjoyed by those banks were “too high.”
Central bank officials said the bank decided to slash the commission amount to Rs 364 million as compared to Rs 546.4 million effective till the last fiscal year 2009/10.
As per the NRB decision, commercial banks involved in collecting revenue, sanctioning budget and holding transactions of bail amounts get Rs. 350,000 a month. The banks only involved in collecting revenue and sanctioning budget will get Rs. 225,000, while the amount is Rs. 100,000 for those involved in a single job.
Earlier, the central bank used to provide commission on a percentage basis. A bank would get 20 paisa for a transaction of Rs. 100. That means the NRB was compelled to increase the commission amount with the revenue and expenditure amount increasing every year. “We were compelled to take this step as the government does not compensate for the amount that go for commissions,” said Gopal Kafle, spokesperson of NRB.
However, the Rastriya Banijya Bank (RBB) and Nepal Bank Limited (NBL), which are extensively involved in government transactions have expressed reservations on the NRB decision. The decision was taken in a meeting with banks involved in government transaction a month ago. “We (RBB and NBL) wrote a note of dissent on the decision and demanded that the existing provision continue,” said Janardan Acharya, chief executive officer of RBB.
With the NRB decision, the commission RBB was getting will come down by around Rs. 100 million, according to him. He said the government transactions have been a “loss-making exercise” for the bank as the RBB was incurring a monthly loss of Rs. 150 million while distributing pensions.
“The government does not reimburse us in time and we have to lose the possible interest,” Acharya said. The central bank stopped providing commission on a percentage basis since the last fiscal year.
Everest Bank and Nepal Bangladesh Bank (NBB) are also involved in government transactions.
The RBB has 65 branches involved in government transactions while NBL
has 42 braches. Everest Bank’s eight and NBB’s
single branch and eight central bank branches are involved in government transactions.
Posted on: 2010-08-09 07:59
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