KATHMANDU, JULY 15
A committee of bankers today presented its report at the Nepal Bankers’ Association (NBA) suggesting almost a dozen austerity measures that banks can adopt in today’s challenging context.
The committee was formed in June-end under the coordination of Anukool Bhatnagar, managing director of Nepal SBI Bank, to study possible austerity measures that banks should adopt to cope with the crisis brought on by the novel coronavirus.
It has suggested different policy reforms from the government side and cost-cutting measures that banks should adopt to minimise administrative costs.
As per NBA, the recommendation report will be floated among different banks and financial institutions (BFIs) for suggestions before an official decision is taken regarding the austerity measures that banks will follow in the coming days.
The study report prepared by the committee recommends banks to stop providing additional facilities to all types for staffers and halt distributing ‘unproductive’ allowances.
Similarly, the committee has also recommended banks to make ‘back office’ staffers work for only five days a week and reduce the operational cost.
The back office is the portion of a company made up of administration and support personnel, who are not client-facing.
Back office functions include settlements, clearances, record maintenance, regulatory compliance, accounting, and IT services.
“Feasibility of these recommendations will be discussed with all BFIs before the austerity measures are finalised,” said an NBA official seeking anonymity.
The committee has also suggested that banks should focus on outsourcing activities over permanent staffers citing that hiring permanent employees will be costlier in the long-run.
As the Nepal Rastra Bank (NRB) bars banking sector from outsourcing services, the committee has recommended the central bank to allow outsourcing for BFIs. The committee has also suggested BFIs to share office space with other firms to reduce the burden of rental charges.
Likewise, the committee has suggested reducing number of ATM booths and installing such booths only at required places. Security issues in the BFI sector and other technical problems should be addressed through collaborative approach over individual approach to reduce operational cost, as per the committee.
Also, the committee has recommended banks to reduce the number of branches by coordinating with the NRB and suggested banks to share IT infrastructure with one other. Substituting paper documentation with digital documentation will also reduce operational costs, as per the committee.
A version of this article appears in e-paper on July 16, 2020, of The Himalayan Times.
The post Panel suggests austerity measures for banks and financial institutions appeared first on The Himalayan Times.
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This news first appeared on https://thehimalayantimes.com/business/panel-suggests-austerity-measures-for-banks-and-financial-institutions/ under the title “Panel suggests austerity measures for banks and financial institutions”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.