Bhutan National Bank’s (BNB) outgoing Chief Executive Officer, Kipchu Tshering, talks to Business Bhutan reporter Dechen Dolkar on his achievements during his tenure as the CEO and challenges in the banking sector. He started and ended his career in the financial sector. He started his career at RICBL in 1978 and served for 19 years. He also served as CEO of RICBL for four years. He joined BNB in June 1997 as CEO when the bank was just six months old. He served as CEO for 22 years at BNB and his term expired on August end. Currently he is 64 years old.
Q. Since you have served for more than 22 years as a CEO in BNB, what are your greatest achievements during your tenure?
A. Great sense of achievement and satisfaction as I reflect upon the last 22 years. BNB has grown from being a small entity to the second largest commercial bank in the country. The paid up share capital of the bank, Nu 59.5mn, has today grown into an impressive Nu 3.95bn. The net worth which was Nu 139mn in 1997 has grown to Nu 7.19bn.
Total asset size increased from Nu 1.03bn to over Nu 40bn, profit from Nu 20.91mn to Nu 736mn. BNBL is the first bank to hit the Nu 1bn net profit mark.
Q. During your tenure did you achieve the set targets?
A. All the targets set have been achieved. There has been continuous payment of dividends every year. There was hardly a year without payment of dividend. The bank has paid dividend since 1997 which amounts to Nu 3.62bn.
Q. What are your contributions to BNB during your tenure?
A. Loan assets increased from Nu 687mn to over Nu 30bn over the years, deposits increased from Nu 767mn to over Nu 30bn over the years, number of shareholders has reached to over 5,000 now and number of branches increased from two to 11 branches with 25 extension offices covering all 20 dzongkhags.
Q. How much revenue did BNB contribute to the government during your tenure and what is the highest revenue so far? Did revenue contribution increase during your tenure and by how much?
A. BNB has contributed a total amount of Nu 3.33bn over the years and paid to government exchequer as tax.
Q. What are the changes you brought in BNB and the banking system?
A. Since 1997 till date lots of changes have been brought in the bank. Number of employees have grown to over 600.
BNB is the first financial institution to bring in computerization system, bank introduced flexcube. It is core banking software which is owned by Oracale. Today Mpay is the most used mobile application, BNB is introducing the VISA card very soon in September and imany products and services to cater to the changing needs of the customers.
Q. In terms of services and new products, many people say that BNB is behind BoB, why is it so? What should be done?
A. Services of BNB are much faster than the other financial institutions and much ahead of other banks.
Q. Most of your career was in banking services, so what are the challenges in banking services?
A. Challenges in the bank is never ending story. Currently, the challenges in the financial sector are liquidity crunch. There is shortage of funds and there is demand for loans and investments but we don’t have money to meet demand.
There is no immediate solution for the liquidity crunch, this crunch may be short term or may be long term partly because government has not made much on the expenditure for last one and half years so the flow of money in the banking sector is very little. The crunch may improve in the future but it is not certain. If the government projects and investment come through probably liquidity will improve in the financial sectors.
Other than this there is lots of competition among the banks, deposit interest rates going up and lending interest rates coming down so that has lot of effect on the banks
Q. What are your plans now?
A.I don’t have immediate plans. However, the end of this month I am travelling outside the country for my personal work for some time. I would like to do a lot of agriculture and horticulture projects which will be beneficial for the farmers. Maybe I can distribute seeds to the farmers. Now I will have more time to play archery and golf and go for gym.