The opening of the first private bank, the Druk Punjab National Bank Ltd. (DPNB), on Wednesday January 27, has left many traders in the border town of Phuentsholing, including Indian traders, excited.
The excitement is with expectations that the new bank, which will open its branch in the border town by mid-February, will help solve the Indian rupee crunch. The announcement from the DPNB that the bank is “considering” to open a new branch in Jaigaon, just across the Indian border, gives more reason for optimism to address the rupee crunch.
Today, Bhutanese traders with dealings in India and Indian traders throng the two commercial banks in Phuentsholing for the Indian rupee every day. The banks do provide the rupee through withdrawals and in exchange of the ngultrum but it runs out before mid-day triggering a severe shortage of the Indian rupee locally.
It has opened ways for informal trading for the rupee where some merchants charge Nu 1 for every Rs 100 exchanged to a high of Nu 5 against every Rs 100.
“We are considering opening a branch in Jaigaon,” said the chief executive officer, Mr N.K Arora, of the first foreign direct investment (FDI) joint venture bank. Regarding the branch in Jaigaon, he said the bank is ready to discuss with the board members and relevant authorities both in Bhutan and India.
If the bank opens up in Jaigaon, then anybody can deposit money in any DPNB branch in Bhutan and can withdraw the money in rupees from Jaigaon within a matter of minutes. Even using ATM cards, a DPNB client can withdraw a maximum of Rs. 40,000 from any PNB branch in India without any charge.
Even without a branch in Phuentsholing or Jaigaon, account holders of Thimphu DPNB can still withdraw Rs 40,000 from any of the 5,000 PNB branches in India because of which businessmen, both Bhutanese and Indian, and parents with their children studying in India are queuing up to open accounts with DPNB.
The DPNB will be launching ATM cards under a tie up arrangement with the PNB in a matter of weeks. It will then be introducing international debit card under tie up with Master Card and once launched, DPNB ATMs will accept all Debit/Credit cards with Master-Card/Maestro/Cirus logo of tourist for payments.
Within two days of the launch, the Thimphu DPNB had already opened more than 400 accounts with deposits exceeding Nu 50m and had sanctioned loans of above Nu 100m. This response was described as “good” by the CEO.
Parents with children studying in India are excited that they no longer have to pay any charges to send money to India. “I don’t have to pay extra charges like those in two other banks,” said Dorji Tenzin, whose two sons are studying in India. He added, “All parents like me will jump to open accounts with DPNB.”
Indian laborers working in Bhutan are also excited with the prospects of sending money back home without any charge. “DPNB is more convenient for Indian laborers like me,” said Haricharan, a laborer from Bihar working for a construction company in Thimphu.
Special focus on private sector
With most of the government and corporate agencies already engaged with the two existing commercial banks, the DPNB has placed a special priority to attract clients from the private sector.
“Our main aim is to be pro-active with the private sector,” said the Bhutanese partner and chairman of the bank, Dasho Sangay Wangchuk. He said the DPNB plans to do better than the two existing commercial banks to work with the private sector.
CEO N.K Arora said the bank will meet the facilities of all types of requirements of the private sector. The banks will not only focus on fixed schemes but will also provide solutions to all kinds of needs of customers, including the private sector.
The bank will not base its lending decisions solely on the value of the collateral security but on the creditworthiness of the customers. N.K Arora said good clients will be rewarded through concessions in interest rates and service charges.
For the employees of the private sector and pensioners, the bank will give personal loans.
“It is good news for the private sector because it is very difficult to get loan from the two existing banks without collateral today,” said Tshering Drukpa, a local businessman.
The bank will provide education loans of up to Nu 400,000 without any collateral. The bank is also providing a special scheme for salary accounts, including the private sector, which will enable an account holder to avail an overdraft facility up to Nu 50,000 against the salary.
The bank is promoted by the Punjab National Bank holding 51% of the share. Bhutanese promoters have 19% and the rest 30% will be floated to the Bhutanese public. The bank will open branches in Phuentsholing and Wangduephodrang by mid-February and more branches will be opened across the country in future.
Popularity: 75% [?]
The picture at the top clearly shows the common Bhutanese people’s opinion – Should I trust my investments with DPNB?