The Bhutan Development Bank Limited (BDBL) celebrated its twenty fifth year at its head office, here in the capital, Thursday.
The works and human settlement minister Lyonpo Yeshey Zimba who in the past served as chairman and member on the BDBL board of directors was the chief guest.
To honor and mark the silver jubilee, BDBL’s publication, a magazine that archived the bank’s 25 years was launched by the chief guest.
With its primary objective “to promote the agricultural, industrial and commercial development of the economy of Bhutan,” the bank claims to have made substantial impact on the living standards of rural populace across the country.
“We have had a sustained growth as well as profit in the past years which has been diverted toward rural development in the country. The organization has come a long way and is now the largest bank in the country with 33 branches across all regions,” chief executive officer of BDBL Pema Tshering said.
As an appreciation and recognition of their services, seven employees who have been with the company since its inception was awarded certificates and souvenir plates with their names engraved. They were also awarded cash prizes of Nu 25,000 each for their 25 years of service with BDBL.
On the same occasion BDBL launched two more products- the “Dronseb Kuendruel TseChog Ngensum “ product or “ The Micro Credit Life Policy” in collaboration with Royal Insurance Corporation of Bhutan (RICBL) and the “Cooperative loan product. “
The CEO of RICBL, Namgay Lhendup and BDBL CEO signed the Memorandum of Understanding (MoU).
BDBL’s introduction of the Micro Credit Life Policy is a step toward achieving the goals of the Financial Inclusive Policy in Bhutan. The product is designed for poor and marginalized groups of people and enables those to insure against unforeseen risk such as health problems, death, and destruction of assets or crops.
In 1998 BDBL had introduced a loan scheme called Group Guarantee Lending and Savings Mobilization scheme for poor rural farmers who could not access formal financial services due to lack of collaterals. Back then BDBL had an aspiration that these farmer groups will one day turn into Cooperatives.
Acknowledging that the farmer groups have now graduated into Cooperatives, BDBL launched the “Cooperative loan product. “
BDBL also handed over a cheque of Nu 0.5mn to Finance secretary Dasho Lam Dorji as donation toward the Wangduephodrang Dzong Reconstruction Fund.
It conferred awards to pilot beneficiaries of its products and souvenirs to all guests at the celebration.
The CEO said BDBL has achieved 73% customer satisfaction according to a survey carried out in December 2012. The bank needs to now enhance its urban client base as well. “Now with the other institutions coming up with new technology banking such as ATMs and internet banking, our clients desire the same and if we don’t cater to it we may lose our clients,” he said.
BDBL was incorporated by the Royal Charter, in January 1988, with assistance of the Asian Development Bank (ADB) to function as a development finance institution (DFI).
It is a registered company under the Companies Act 2000 and licensed under the Financial Institutions Act 1992. The bank now functions as a domestic development bank with cheque facilities after obtaining its banking license in March, 2010.
BDBL is the only bank that focuses on the rural mass and has assumed responsibility for the nation-wide credit program, which mainly provides seasonal, small and medium term loans to the country’s farmers.
It had also commenced industrial lending operations providing term finance and working capital for industrial and agro-based ventures. Farmers Outreach banking was also introduced to the clients in the rural areas, where the field officers visit the farmers for loan disbursement, collection, deposit, withdrawal etc, at fixed period, place and time.
“Our officers visit 179 Gewogs on a pre-determined time on a monthly basis and on a quarterly or half yearly basis to the rest of the Gewogs around the country,” the CEO said. The clients in the rural areas can save expenses to come to the branch office.
Due to the nature of its client base, BDBL has the highest percentage of non-performing loans (NPL) or bad debts in comparison to other commercial banks in the country.
The central bank regulates the operations of BDBL as per the Prudential Rules and regulations and as per provisions of the Financial Services Act and the board of directors is appointed by the government. The government also owns 93.50% of it’s paid up share capital.
The government enhanced the paid up capital by another Nu 100mn in June 2009 to Nu. 200mn.