सिंहदरबार संवाददाता
Former banker Kiran Kumar Shrestha has been the Chief Executive Officer (CEO) of Rastriya Banijya Bank twice and is now engaged in entrepreneurship. Singha Dabar Editor-in-Chief Narayan Prasad Poudel asked Shrestha, who is increasing his investments in hydro and agriculture, “You started your career at Nepal Bank, finished one stage of your career, and served two terms of eight years as the CEO of Rastriya Banijya Bank. You were in the place of lending. These days, you hear,,##Kiran Shrestha is in the place of asking for loans. He is going around saying, ‘I will build a hydropower project.’ He is saying, ‘I will do something in agriculture.’ What is the difference between being in the place of lending and being in the place of taking loans?’ ##?”
I also worked in Nepal Bank Limited for 28 years and then became its General Manager, and then I retired. After that, I got the opportunity to work in Rastriya Banijya Bank for 2 terms as Chief Executive Officer.
Naturally, we are doing the work of the bank, the work of economic development. However, there is a natural belief that banks should be a little vibrant in order to make it dynamic. Therefore, while I was there, I was in a position to focus on the priority issues of the nation, which were to allow investment in small and medium industries in sectors such as agriculture, tourism, hydropower, and so on, and I was in that position and after spending nearly 36 years in that place for a long time while working in the banking sector, it has now been 10 months since I retired.
It has been almost 1 year now. And even in the meantime, I am a person who is actively working. I still feel and have felt that I should do something from my place. Because of that, even when I was in the bank, when I was looking at my priority areas, the areas of hydropower energy and agriculture were also my favorites and those were my priorities.
So I also wanted to see what it would be like to work in those areas that I was interested in, the country’s priority, and in every way, as an engine that drives the overall development.
Now, in order to put that desire into practice, of course, we have to take the support of the bank. So yesterday I was in a place where I could give a loan, and now I am in a place where I can take a loan. These two roles are different, but the purpose of both is the same. I think so.
Yesterday, when you were in a place where you were lending, you would look at those who came to ask for a loan. Today, when you are in a place where you are asking, how do the lenders look at you? ##Did you find any differences? ##?
## There are definitely differences. There is still a lot of new experience to gain. I don’t want to get to that so soon. But what were the 2-3 things that I saw? When we were in the bank, there were many people coming, so there were many choices.
That’s why we can’t do it in some cases. It was easy to say various things that it’s not possible. But in fact, when we go from here to there, the kind of effort we put in. The way we make a plan. The way we use our power.
In that situation, actually reaching the bank was coming through a very difficult path. Earlier, they used to do so many processes for me in internal activities, internal homework. At that level, I actually felt a little different. But now, looking at it, it’s all about risks, returns, and success.
All these things have to be taken. What about risks? Then the individual has to take them himself. Yesterday, we used to take them institutionally, but today, the individual has to take them himself.
It was said that it was difficult to get loans from Nepali banks. It was thought that it was easy. Isn’t that so ?
Let’s not even say that. But you have to go ahead with the loan process. In order to go through that process, entrepreneurs and businessmen have also come with great effort after doing a lot of exercises, preparing for what is great. That is being felt even more.
All the bankers we talked to, from the senior leaders of the National Bank to you, have the same tone. We do traditional banking. That is collateral-based lending. Banks do not believe in dreams. Banks do not believe in skills. They ask for collateral. Only then do they give loans. That is why collateral has become collateral. Whether the dream is good or not, that is why banks have become a little more traditional. They did not prepare skilled manpower. They did not create entrepreneurs. It is alleged. What do you see when you sit there? ?
In this too, we have to analyze it a little differently. Now naturally, our lending is collateral-based. But this does not mean that we are not going to go to the project base.
It is not that there is no project base. What happens in that? Then we would sit there and watch. This question would come up again and again. Do you only need collateral? You will not do it without collateral? What would be our example when it comes to such things? Then the most example of projects in Nepal is hydropower.
Hydropower, which is located in a forested area, where there is no valuation as access, and there is nothing there except landing from all projects. But we are landing on it and the kind of landing that hydropower has now.
If we look at it, I see it as a great example of what banks have done in projects. But why is that possible? If we look at it from the bank’s side, what is the bank’s money? Then it is not the employee, CEO, board. It is the money of the general public depositors.
Since it has to be protected, what are the returns on it? It is a question of what happens in hydro? Then we have done a PPA with the Electricity Authority. If we can mediate the construction risks and analyze them well, if there is a good study, we can go straight away.
What is one thing that has been seen? If there are mechanisms to ensure returns, then Nepal’s business can go towards that. Basically, there is no such thing as taking the old base. But now, gradually, large-scale projects are coming.
If you look at those hotel, resort type projects, etc., and now there are various types of IT-related things, various types of service-based things. It is gradually moving in that direction and I think it is moving in a positive direction in a process of modernization.
The concept of hydro that you are working on today. You are working on the concept of agriculture. What is that ? And what is the relationship of the bank with that ? How will it move forward ?
My interest and priority is also in this country. It is about hydro and agriculture and there is a feeling that we need to move forward in that and we are doing two things by forming teams. One is that we have a company called Renew Energy.
With that Renew Energy, we basically do solar and hydro work. We have already started solar. One or two projects. They have also come to the market. And our work on the other hydro is also in the final stages. It is in the final stages.
I think we will have that final soon. We have to go in a good way. Now, the natural resources and political resources that we have are things that we will need for a long time. And it is also an area with scopes that can be exported tomorrow and earn foreign exchange.
From an environmental perspective and a carbon emission perspective, it gives a very positive message and all these things make the hydro sector potential for our country. Therefore, the kind of demands it has and the kind of future possibilities we are talking about, it is abundant.
So that its materials are naturally the greatest blessing that we have. Country wise may be different. Other countries’ resources may be the same. But what do we have? Let’s say that kind of gift of hydro or we should use what nature has given us. That is not just for us now.
It is a matter of necessity for everyone. So we have to go well with it. We are working with the idea that. However, since we are not yet finalized, it will take you a little time to tell us this project. What about agriculture? I myself worked in banking for a long time.
When we look at agriculture, two problems are visible. One is the matter of production and the increase in productivity in production. How to increase productivity? There is a question like this. But the matter of bringing the produced goods back to the market and the producer who produces them getting a fair price and the kind of consumption that the consumer also gets.
There is a big gap between those quality things and those that are available at a reasonable price. In particular, our local products are not getting those markets and there are various challenges in reaching the consumer. Because of that, the consumer has also been affected. The producers have also been affected.
We thought a little about the cold stores in Nepal. Again, it is not that cold stores do not exist in Nepal. But most of the cold stores are not well-operated and are not in good condition. I have also invested in cold stores. What did I see when I studied them a little? Then, the new technologies that we are currently using are related to cold storage.
Those new technologies have not been used. Like the humidity fight, the multiple chamber, which is a type of thing that we can keep many types of goods in the same cold store in multiple ways. We can also keep some very soft things that spoil quickly and we can also keep some hard things that can be kept for a long time.
When we talk about fruits and grains, their natures are different. Their temperatures are also different, but they can be kept for everyone. Now a technology is coming. Chinese technology is also popular. It is also available in other countries. It is easy for us.
After studying those technologies, taking the opinions of exporters, and visiting them, what conclusion did we reach? If we can set up such cold storages, we can collect local products from indigenous crops and transport them nationwide. From the time of production, we will collaborate with each other to ensure everything from promotion to investment and purchasing, and after creating new patterns and storing them, we will distribute them and transport them nationwide.
Where is the location ? What structure are you building ?
Our location is in Ratna Nagar, Chitwan. We have already bought some land there and started. We are currently doing civil structure work. Work is also progressing for the machine. The time we have kept it is 1 year. 3 months have already passed in a year. Now 9 months are left. We are working with the intention of bringing it forward within 1 year.
What structure is it in ? How much capacity does it have ? How much investment is required ?
In terms of that land, it has an area of 4 bighas. That is a target of 10 thousand metric tons. I think it would be quite large in terms of volume, 10,000 metric tons. Its cost is also in the range of 750 million to 800 million.
Nepal’s corporate sector did not engage in agricultural manufacturing but in production. It went towards processing. It is said that it went towards cold storage. They should have been involved in the production sector, ##. Either they did not see the opportunism there or what we are doing is for protection. Where should we sit and watch this? ##
## We have also looked towards the Terai. After talking about doing agricultural work, look at different places. What a great opportunity this is, many lands are now available on long-term lease. What about lease rental? What about reasonable rates now?
What else seems to be potential? The reasons for this are varied, but what is the main reason? Because of the shortage of people who do farming, people who go abroad for employment, instead of farming themselves, they lease those lands, rent them out, and keep 50 percent of their own.
That is a more likely possibility. I think that is the path we should take now. We are also studying this to connect with production, and how to connect with which products to connect with production? It is not possible to buy land at capital cost. Large-scale agriculture has also been sold in many places.
Many entrepreneurs are also going into agriculture. In a year’s experience, there may be more haste than many things, but what about small-scale agriculture now? That is, its productivity and production. Since it is expensive to bring to the market, it is not in much demand and attraction.
But if it is large-sized, it can reduce the cost and implement mechanization. Those things are also being used a lot. So seeing that possibility increasing, I think there will be a big transformation in this sector within 3,4,5 years.
Instead of going into agriculture, we should also think not only about storage, but also about what to store if there is no production. What is another problem? An agricultural expert had come from Japan. He had come to Nepal to discuss collaboration with municipalities on compost fertilizer.
We got a chance to meet him. What did he say? You are doing agriculture. We are also doing agriculture. But what is the difference between you and us? You put in as much labor. As much time as you put in. As much productivity. There is a lot of difference between us. We grow up to 7.8 pods on a corn plant.
We also do 3,4,5 rotations. You do one. You do 2,3. He said. What is it? He said the reason for that is that it is like a person. Just as a person needs to have a good food system to be clean. Health checks need to be done. If it gets sick, it needs to be treated promptly.
He also needs the same thing as we do. If the fertilizer you give is not good in the right amount, the compositions have to be adjusted. He also demands treatment like the treatment we do. There are things like water. There are things like sunlight. If we can adjust all these natural things, your land will also be good, which motivated us.
What to improve–##What to do ##? What do they say? ?
First of all, increasing the quality of fertilizers and soil is the most important thing. Therefore, increasing the productivity of agriculture is also a matter of our utmost focus.
But we are imagining chemical fertilizers again. ?
It seems that we are looking at the short term, faster, faster, and more immediate effects rather than looking at the long term effects.
How do we choose whether we should go towards producing in bulk and producing the products we need or whether we should choose to produce quality organic products and export them? ?
Both are important. It has to be done in bulk. Without going in bulk, our cost is not effective. If there is no quality, then the bulk alone will not bring value. Price is also needed. Competition is everywhere. Without bulk, there is no cost effectiveness and without quality, there is no prize. So, the combination of both things is the way to go.
We hear that in Japan, , in America, 2##, ##, ##, ##, 3 percent of farmers are involved in agriculture. We are saying that we are in the 60, ##65 percent. We do not even produce enough to eat. They export all over the world. Where does land ownership come into play in this? ?
This is also a bit of a philosophical matter. It is also a philosophical matter. Because should land belong to the state or to individuals? There are many policy-based theoretical matters as to how much it should be. But still, there are such things as ownership without land.
You are now in core banking, which you have practiced for the past 35, ##36 years. We want to guide you there. From Nepal Completely Traditional Banking to the last, you have been working under your own leadership. What were those early days like ? ##When you were working at Nepal Bank ##?
I joined the bank in 2043 BS. Actually, at that time, there was a very cumbersome system. There were very large systems that had to be done manually. From check entry to payment, interest calculation, everything had to be done manually. But one problem was that even if it was a small branch, 15 to 20 people had to work.
The systems were not well developed. Talking about machines, there was nothing except a calculator. That calculator was also not modern. It was called an adding machine. That was all. Letters also had to be sent internationally. For that, a separate typist was hired.
There were two types, Nepali and English. That was a matter of sending. From that, we have evolved and now we have come to digital. I think. Such a big change has been such a big revolution in the banking sector. It has taken a big leap.
You were in a state where Nepal Bank was in a coma. You are also its rescue operation manager, aren’t you? ?
Nepal Bank is the oldest bank. We worked there for a long time. That bank was fine until the 50s. It doesn’t take long for things to go bad. It only went bad from 54 to 58. There are many reasons for that. From the political situation at that time to the management and board structure.
We were doing well. But when we came from 54 to 58, the situation became very bad. Before that, our working style was traditional. It was traditional. It had to be modernized. I am saying this from the perspective of institutional good governance. At other times, there would have been complaints about our working style. We may have been there later too.
But in the 5 years from 54 to 58, there was a situation of very weak corporate governance. From 1959, the World Bank and the IMF brought in foreign management. Foreign management ran it for 5 years.
Then the Nepalese took it over and reformed it. I think the situation is similar in commercial banks. I look at the periods on both sides. Let’s talk about what happened. It was a situation worth studying. From 1954 to 1958, institutional governance was weak, which led to that situation.
But today, both banks have overcome all those things and are competing in the market as competent. Then the government and the National Bank brought in a financial situation improvement program. Then we brought in foreign management. At first, when foreign management came, what would they do? But later, after they had been working, they brought in some kind of reforms.
And what is the good news? Even though the foreign management returned, the team that was working together in both banks continued the reforms. Due to this, both banks have now become competitors. They are in a position to compete with private sector banks.
The return is in all other respects. This is the result of the situation where the domestic management is also becoming stronger.
You led the National Commercial Bank twice as CEO. The governments kept changing. The government’s policies kept changing. The government kept saying, “Give loans to this sector, give loans to that sector.” The bank you are leading has 17 percent government investment, leaving aside NIDC. How did you work in such a situation? It is an opportunity for a CEO to work with 7 ministers and 7 chairmen. It is also a challenge. The challenge is that when ministers change, the government changes, and that means a political change. People from different parties come with their own philosophies, their own beliefs, and their own priorities. Again, when I said person, the matter of working style also came up. I remember. How was whose working style? But whatever it was, I can say this much with a guarantee.
I worked by maintaining a good and harmonious relationship with everyone and winning everyone’s trust. How I won that trust is better than how I was appointed, when I was appointed, there must have been a government. There must have been a political party. After I became CEO, I never thought in such a political way.
I am a person appointed by the government, considering the government’s priorities as my own priorities, I never said this or that to perform my duties. I have worked continuously. The role that was given to me. The oath that was given to me. It is also a claim that I have fulfilled my role by following it 100%.
Those who go to work in government banks or government agencies hardly make it through one term. You have made it through two–##two terms. The chemistry that binds them is strong, isn’t it ?
That is also one thing. But it is a bit difficult to praise yourself. If we look at the financial indicators there, if we look at other areas of improvement, if we look at the return, capital, business, profit, dividends given to the government, capital growth, human resources, there was also improvement, but the best thing was our teamwork. There was such coordination that we were able to go that way as if we were on a mission.
Seven ministers brought eight budgets in eight years. In each budget, a program was brought from the banking sector to increase entrepreneurship by providing loans in this way, and the central bank would entrust you with the responsibility of implementing that program. How did it work when the government owned it? ?
The concessional loan that came in between. We took a good lead on that concessional loan, but the National Bank said that 10 loans should be given from one branch. We should give a percentage of that loan.
We will comply with 10 of them. We complied with that and what was our goal in that, so that even in that loan, small loans that go to a very low level now have to work hard and have to be paid by the real people, who do not have collateral. This is a concessional loan without collateral.
That too was an inclusive type of character targeting the most backward class, the victim, the Dalit, the women community. So we knew and when we went, our signal was that it was primary and we had to take it forward aggressively, but we did not compromise on its criteria, selection, and priorities.
How much pressure did you feel ? #Because even today, the National Commercial Bank is famous as a bank that gives loans at low interest rates ?
In Nepal, pressure should be considered normal. If someone says it doesn’t come, it is a lie. It has to be managed. We cannot work outside the standards, principles, and policies that we have.
This cannot be done. If we agree on a method, no authority can force us. But we should also be able to ask questions logically with proof, indicating all the scope of the law. I think I have convinced many people by managing in this way.
During the same eight years of leadership, you also led the Management Association of Nepal. You have established yourself as an excellent manager. What should we do ? To bring everyone together and take them forward in this country ?
For me, this is also a matter of great pride. We read some things in books. Everything is written. But what we read in books and translating it into practice is a different matter.
Therefore, when you sit in such an association and hold a management position, the interactions, meetings, and exchanges there are different from the things in those books in our context, and the content of the country itself is different. Society is different. In our context, we learned a lot about taking their experiences, applying them, and how to go about it even when faced with different challenges.
We also held big conferences. All these things have given me opportunities to change my horizons, think differently, and change my working style, so I consider them a huge opportunity.
You management bankers are people who take a little risk and create entrepreneurial people. He is a person who prepares people who say that they want to get a job but not a job but a business. There was no unified effort from the state while preparing them. No matter how many entrepreneurial people were born in Nepal, they came on their own. They became established. The argument is being made that even though the state has brought various training and skill development projects, they have not worked properly. How do you see this issue? Our rules, laws, procedures, and thoughts are a bit complicated. It is difficult. And now, there are new things that require approval from some body, and now the work has to be completed within 7 days. We are people who have worked. What did I think? Then this work will be completed by tomorrow or the day after tomorrow. Because there are not many things.
Whatever we had demanded, if you do not do it, tell us why it will not be done. We said that. Okay, bosses. But we said that you should write down the reason why it is not possible. They are afraid to write that. They will not accept it. It is more difficult to make a decision than that.
Later, we also said while we were walking. Sir, this will be the last. We rushed so much. We fell so far behind. That means our project was delayed by a month. That is why the interest rate on our loan increased so much. The time that our project was supposed to earn was lost. They doubted the commitment.
Looking at a couple of examples, it would have been better if the problems of mentality, the problems of not being able to take risks could have been removed. Our state did not encourage those who thought, “I will open an industry. I will open a company. I will pay taxes. I will provide employment. I will earn profit. I will invest again.”
The most important thing is to change the policy and rules. But until we change this mentality. Everyone has one hundred and one education. There may be two or three degrees. But even if there is a belief in the mind, I will take risks and do that agreement. Whatever is necessary.
The agreement is within the rules. Or if it has to be approved somewhere, I will get approval from there and give it. I will do it today. I will do it tomorrow. There was no such attitude. I also came from a place where decisions are made. We also know that there is risk.
When I say this, I feel like the other person is experiencing what he is going through. That is why if it doesn’t happen, it won’t happen on time. There is a problem with that kind of attitude. The state’s policies, rules and laws that need to be changed. That is in its place. That is a physical thing.
How can we change the attitude in mental matters too? Maybe. Making decisions quickly. This kind of effect has a problem in cultures like that. That is also necessary. After coming to this side, these things seem like pain. In fact, it seems like it is difficult for people.
You have left banking and turned to entrepreneurship. It is appropriate to ask you this. The bureaucracy here does not forward the file. The company registration place does not look at it properly. The general society there is hostile towards making money. Politicians think the same way. So what we are envisioning in Nepal. Let investment continue to increase. Let employment be created widely. Let us be able to produce the goods and services that we need ourselves. Then we will export. We will prosper. Capital income will increase. It seems like this is just a dream. There is also fear. This is also fear for the future.
We should not think at that level. When we look at it, we should also look at it comparatively. Now, if you say that there is absolutely nothing, you can come up with 100 such lists. You can also come up with another hundred lists saying that there is.
I am at the extreme of two things, and there are people who say that it has become very widespread. One is that nothing has happened. There are also people who say that. Both are wrong. The fact has to be the fact. There has been development today compared to yesterday. Whether you take that for 47 years or give it to 7 years.
How much was education, health, communication, networking, production, average life expectancy today than yesterday? How many schools and colleges were built? That’s it. There has been development compared to yesterday. But now the speed of development is the speed that should be there. Compared to the neighboring world, we are behind. If nothing happened, yesterday there was only one RNAC.
Today there are so many airlines. That is development. There were only two banks. Today there are so many banks and finance companies. There has been development, but what has the development done? Compared to the kind of development that people want today, the development that our neighbors and the world are experiencing, it is still behind.
You have left banking and turned to entrepreneurship for 10 months. In the meantime, some important developments have been seen in the banking sector of Nepal. The National Bank has taken over one institution. It is said that discussions are also being held on other matters. What does Nepal’s banking sector look like from the outside? ?
In fact, this year Nepal’s banking sector is facing challenges. Yesterday and today are very different. Now let’s look at our liquidity situation. There is a lot. Let’s look at the demand for credit. It is in a very low position. The environment outside the credit. The market is not dynamic. Economic activity is sluggish.
Because of that, they have not been able to repay the loan. Because of that, NPA is increasing. This is a very challenging situation for the banking sector. The entire system is the same. Now a solution has to be found for this. The solution is that the banking sector alone cannot do anything about it.
It has a role in supplying the demand, accelerating that effort, and being active. But what is the major thing? Then the state itself had to take this activity forward. It had to be increased in terms of policy. Now some reform work has been done.
Now some things have changed in terms of policy. But now the main thing seems to be capital expenditure. Until capital expenditure can be properly increased, it will remain an economic problem. There may be means for resources. Then there are things that we also need to explore. Good days will come. It doesn’t matter.
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