Inner-View

Sashin Joshi, Acting CEO and Director and Head of Corporate & Institutional Banking, Standard Chartered Bank Nepal Ltd.

How do you feel about your bank being rated as among Asia’s 500 largest bank by Asiaweek?

The financial year 2000/2001 was yet another year of strong performance by the bank. Naturally this is a matter of pride for us. We had worked very hard for it and are very rightly rated as amongst the region’s 500 largest banks. Moreover, our bank has also attained the highest overall ranking amongst the three banks of Nepal listed by the Asiaweek Financial as the Asia Pacific Region’s 500 largest banks.

In fiscal year 2000/2001, the Inland Revenue Dept, HMG, has rated your bank as the second highest tax payer in the country. How do you feel?

Well, our reports tell a different story. We believe we have been and are the number one tax payer institution in the private sector in the country since the last six years. The published provisional year-end result of Standard Chartered Bank Nepal Limited (then known as Nepal Grindlays Bank Ltd.) attests the performance of our bank. As per the unaudited financial results, net profit after tax and provisions stood at NPR 419 million.

Given the politico-economic chaos in the country, will your bank be able to retain your tax ranking?

Indeed the overall climate of the country is not encouraging but we are fully confident that we will retain our position as the number one bank in the country.

Our current tax system is very complex and full of ambiguity. It gives lots of discretionary authority of interpretation to tax officers. Even though we are among the highest taxpayers in the country and follow very stringent international norms of accountancy and transparency our tax assessments are not completed without going through dispute resolutions because of unreasonable add-backs done by tax officers.

Frankly, I have not gone through the proposed new Income Tax Bill in detail. But what I have been informed from various sources is that the government has formulated the Bill with a very good intention. But there are apprehensions that the draft bill is complex with many grey areas without necessarily reducing the discretionary authority of tax officers.

Nepal Grindlays Bank Ltd. changed its name to Standard Chartered Bank Nepal Limited (SCBNL) from the beginning of this fiscal year (16th July 2001). In spite of tough competition, our consistent performance is a testimony of the faith our customers and stakeholders have in us. Our bank has recently launched a new product for large corporates, called "Cash Management-Quick Collection." The scheme provides an efficient mechanism to collect export receivables directly by the bank, from Indian customers of Nepalese companies. The key customer benefits include multiple locations in India for deposits, faster collections, convenience of courier pickups of cheques, and superior MIS for recollection. With this product large corporates can manage their funds better and hence, their businesses better. This scheme has been launched with special arrangement with Standard Chartered Bank in India. We are now going to expand our activities and investments in consumer banking in a big way without diluting our efforts in corporate banking.

It has affected the banking industry in Nepal, including us. Despite government assurances, there is a sense of fear and uncertainty among investors. The government should weigh potential impacts before making such radical announcements.

Three of the world’s leading international credit rating agencies, Standard & Poor’s, Moody’s Investors Service, and FITCH IBCA have rated Standard Chartered Bank (SCB), which is registered in London, UK, very highly in the short term and highly in the long term credit Rating. This reflects that SCB is a strong bank, with a strong capacity to meet its short and long term financial commitments and a low expectation of credit risks.

The bank in Nepal and its stakeholders are proud to have this UK based bank as its 50% partner. Today Standard Chartered is the word’s leading emerging markets bank with over 600 offices across 56 countries. Thus Standard Chartered Bank Nepal Limited is a truly international bank in operation in Nepal.

" I hope that SAARC Summit will be held in Nepal this year"

Is the "Gujral Doctrine" towards India’s neighbours still functional? If so, is it at the same level as it was then?

I had the privilege of working with Mr. Gujral while he was the Foreign Minister and then the Prime Minister of India. I think, we have to be a little clear about what the Gujral Doctrine is. I find that the interpretations that are put on it are not exactly what the doctrine intended to be. If you look at the very essence of the Gujral Doctrine, it is that India has a special responsibility towards its neighbours. And that India should take into account the concerns and requirements of its neighbours and this would not be on the basis of strict reciprocity. I think that is the essence of the Gujral Doctrine. So, let us be clear about that aspect of the Gujral doctrine. No immediate reciprocity but certainly, India would expect that India’s interests and concerns would also be taken into account by its neighbours. I do believe that that approach of India to her neighbours is still continuing.

This is such an absolutely horrendous event that it is very difficult to say anything. Also, the events are moving so fast that it is very difficult to predict which way it will move. And in this context, I certainly would like to hope that the SAARC Summit would be held in Nepal this year. The dates are not announced but discussions are going on.

There is this idea that it was India which was against the holding of SAARC Summit two years ago. I would like to suggest that it is not entirely true. In today’s world, nobody really likes an established democracy to be overthrown. That we have to take note of. You must note what has happened in Fiji. Take also note of the tough stand of the Commonwealth towards both Fiji and you must also remember that even today Pakistan stays outside the Commonwealth. So, it is not a matter of India’s attitude. Within the neighbourhood there were serious concerns. But obviously we all have to live with our neighbours. India, as you know, had initiated dialogue with Pakistan. So we have no reservation about the SAARC Summit.

You know, if we are neighbours, we are going to have some local issues or the other. And I think the first approach that we all have to adopt is not to impute motives when something happens which can be settled at village level or at district level. But if that is interpreted to implicate "India’s hegemonistic attitude", I think it is totally out of context, out of proportion. There are things that happen in Nepal that affect India adversely. Things that were done here have affected India. Recently, there was this canal of the Gandak barrage which was cut in several places by Nepalese villagers. Of course, they had their problems, which I understand. All such matters have to be seen in the context of local developments done by local people for whatever the reason may be. These do not flow out of any deep seated plan or whatever. First, we have to agree, if we are to build on our relationship, not to attribute motives. We have to deal with it rationally and maturely. None of these are insoluble. This should not be seen as a plan to hurt each other.

Nepal and India are two sovereign states which are neighbours, which shall be neighbours and we shall have to live with each other regardless of whatever the internal system of the other country may be. I cannot comment what the future would be, but I should certainly like to hope that whoever is in governance either in Nepal or India would deal with neighbours in a neighbourly manner.

Quite honestly, I cannot comment on what the former US Ambassador has said or what he had in mind. But with regard to the specific question, as far as Sino-Indian relations are concerned, they have been improving steadily in the recent past. There have been many interactions including at the highest level and I am confident that Sino-Indian relations will continue on the same course in future. I have a little problem with the use of the term "Islamic forces". Because, India itself, in terms of population, is perhaps the second largest Islamic country in the world. But yes, certainly there are third countries, which have misused your (Nepalese) hospitality in actions against the interests of India. That is something which is very well known, very well documented. But I will repeat that I have a problem with the world ‘Islamic’ in this context.

When our Foreign Minister was here he made it clear that there is no intention on the part of India to make any changes in the basic structure of the Treaty. Let me repeat that very categorically. But the fact that over the past five years, certain things have come to light where Indians have concerns. Now those concerns need to be addressed. Let me put it this way. This is really a unique Treaty where one side has unilaterally granted duty-free entry of goods. The purpose behind that was that it would help the industrialization of Nepal and that it would help in employment generation in Nepal. It was not, in any way, intended that Nepal would be used as a kind of conduit for selling third country goods to India which, in any case, is not good for Nepal either. So what we would like to see is a situation that these issues are clearly addressed and if there are lacunae, if there are genuine concerns of any side, then these are there and should be resolved. Otherwise, one keeps on having differences which is not a good idea. And I am confident that this issue will be resolved in the interest of both the countries.

The Hrithik Roshan incidents were really very unfortunate and they were, shall we say, India specific which has inevitable fall outs in a variety of ways. But the other developments that have taken place here, again deeply tragic, are matters of concern not only to Indian business, these are also matters of concern to all businessmen.

Firstly, I don’t know if anybody has left. As far as the joint ventures are concerned, and as you know India continues to be the largest investor in Nepal in joint ventures, they have had their share of problems. But these problems are not unique to them. These problems are being faced by others also. But I hope that with the dialogues which are going on conditions will be created soon for foreign investors coming in Nepal which will be conducive.

No, we have been very anxious initially on SAPTA and as you know India’s list of concessions runs into several thousands. We are also very keen that SAFTA which, according to the Male Declaration, was to be implemented by 2008 or so. No, India has no problem with SAFTA. In fact, because SAFTA is taking, in our view, much too long, with Nepal we had this Treaty, with Bhutan we have an arrangement. With Sri Lanka, we have entered into a free trade arrangement, not unilateral, but the Indians would give Sri Lanka duty free access within three years, Sri Lankans will take five more years to give similar facility to India. I think India is discussing on similar lines with Bangladesh. This only goes to show that we are very keen for SAFTA to go ahead. But, because some countries have had problems with SAFTA, so I cannot say when SAFTA would take place. But on our side, because SAFTA is not moving, we are trying to do this with individual countries. Because we do believe that economic cooperation among the SAARC countries are of primary importance.

Frankly I have not heard this before. His visit was duly announced and Ministerial visits are normally not leisurely. And the purpose of his visit was also very clear, to express condolences of the Government of India on events here and greetings to the new Prime Minister of Nepal and to restate India’s absolute commitment to friendship with Nepal.

I really can’t comment on that but I will just go back and say what I have been saying all this time that we have been neighbours, we have to live in peace, we have to live in friendship, we have to ensure the welfare of each other. If there are such elements in either country, I hope that wider and saner council will prevail for the welfare and benefit of the two countries and the peoples.

I think it is always up to a country to choose the way it wishes to go. I certainly cannot comment on the appropriate form of governance for any country. It is for the people of the country to decide. But essentially I think that in any country, whatever is the system of governance, must have the endorsement of the people, if it is to be viable and if it is to be acceptable both within the country as well as internationally. But it is really not for me to comment on what is good for Nepal. It is for the people of Nepal to decide. I think over the past ten years constitutional monarchy and multiparty democracy have done well in Nepal.

Firstly it is not 70,000, as of today it is 3,000. I am on record on that. Let me clarify there is some background to this. I think a committee that was set up on security in India after Kargil intrusions had suggested that there should be steps taken for a move for effective guarding of the borders. It is in that context largely that people have been deployed. This may increase from 3,000, but I doubt very much that it will get anywhere near 70,000. You also have deployed your army. Both countries have been looking at better management of the border, because there needs to be better management. This is recognized by both the sides. That is a separate exercise that is going on. But be assured that there is no massive deployment of troops on the India-Nepal border.

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Standard Chartered Bank Nepal Ltd. Shows Strong Performance

" I hope that SAARC Summit will be held in Nepal this year"