Nepal’s banking industry has reached a stage. This is what one can conclude looking at the recent development. The past trend of entering into a joint venture with a foreign bank is gradually vanishing and most of the new banks are indigenous.

And if Kumari Bank Ltd., the 15th member of the commercial banking industry in Nepal, is any indication, there is no need to look up to a foreign equity holder to guide towards new technology and new products. The indigenous capability to select the technology has been built up.

Operational for the last nine months, Kumari Bank Ltd. is now equipped with infrastructure to operate internet banking and its soft-launching is planned for the near future, possibly during this year's CAN Info-Tech.

Being the 15th however does not leave much scope to prove oneself different from the rest of the crowd. With a couple of more banks already licensed to open their shops, the situation seems more difficult for Kumari Bank. Still, the bank executives believe that they have positive points two show their bank different from others. Their indication is at how backward the banking industry and the capital market are here. "All the banks are selling similar products though packaged differently", says Suman Joshi, Assistant General Manager of Kumari Bank assessing the present market scenario. In his analysis, Nepali banks do not have a great difficulty in collecting deposits nor in lending because the capital market is not yet sufficiently developed so as to offer a viable alternative to those who save or invest and those who borrow. "Hence, banking is a fairly straight-forward business here", he concludes. Under such a situation, to claim to be something different from others is very difficult.

Nevertheless, Kumari Bank appears to be projecting itself as "a complete bank" indirectly implying that others are "less than complete". Joshi corrects the interpretation and says, "We simply wish to be a bank which can provide the widest possible range of facilities". According to him, his bank is already providing "the widest range" of consumer loans and is going to introduce a couple of new products in corporate lending in the near future. "Moreover, we’re going to be more complete than the others in delivery channels as well", he adds revealing the plans for internet banking, phone banking and door-step banking.

Licensed some five years ago, Kumari Bank is a case of prolonged conception among the banking sector projects. There were misunderstandings among the promoters on trivial issues which were instrumental in the project being delayed. Now that the problems have been resolved and the bank is operational, its history provides an interesting case study in the genesis of Nepali public limited companies.

Now already into ninth month of operation and with comfortable track record that leaves nearly Rs. 6 million as operating profit this year and nearly one billion rupees as deposits, the bank has crossed the first phase in its growth, conclude the bank executives.

The first phase in the development of a bank comprises of building a positive image to win depositors’ confidence and mobilize deposits without which the bank becomes virtually non-functional. "That we’ve crossed", says Joshi pointing at the solid deposit base managed so far. The challenge now is in investing the fund profitably and setting up a sound monitoring system in order to achieve a sustained growth. Had it been a joint venture, such a system would have been transplanted by lifting it from the joint venture partner with some necessary modifications. But in case of a totally indigenous bank one has to develop everything from the scratch. Kumari Bank has attracted senior level managers from three of the major joint-venture commercial banks. That is virtually proving to be a sort of the second generation of technology transfer - first from the foreign banks to the joint venture banks in Nepal, and then from the joint venture banks to the new bank. Kumari Bank is thus uniquely poised to be able to adopt best practices and create a platform for sound business growth.

That is as far as the human aspect of the resource is concerned. The mechanical part is available for picking for a price. Kumari Bank did exactly that by buying the Globus software from Temenos, the global leader in banking software. That very software has given the bank the strength to claim to be a leader in introducing modern banking service in the county - Internet banking. Whilst this is an eagerly awaited service and its launch long overdue in Nepal, it will be in the nation’s interest to have appropriate cyber laws in place to give this an impetus. This service can be instrumental in improving service quality of the bank and also tapping the Nepalis living abroad.

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