The Bhutanese Leading the way.
The Finance Minister Namgay Tshering confirmed that the National Cottage and Small Industry Development Bank Limited (CSI) will be merging with the Bhutan Development Bank Limited (BDBL).
One of the biggest concerns of the merger is that the collateral free loans given by CSI to rural farmers and cottage and small industries will come to a halt.
This is especially after a senior BDBL official last week told this paper that if the merger happens the CSI bank will have to follow the BDBL norms that do not allow for collateral free loans.
The minister assuring continued collateral free loans said, “BDBL norms can be changed by the government. This is a policy matter. They read between the rules but they are made to follow the rules. The government passes the policy and the board and management incubates the policy.”
He said CSI Bank is not only a development and policy bank but it is also a non deposit taking bank.
Lyonpo said, “Had BDBL been very effective we would not have created CSI bank.”
“If you look into the operational costs of BDBL then they reach everywhere in the country to the Gewog level even with a full fledged office. If BDBL takes up the rural development and financing agenda seriously then CSI in a way is also doing the same job. Now when you say we are merging BDBL with CSI it is just to bring an efficiency and in terms of mandate we are not trying to trim down,” added Lyonpo.
He said the mandate scope and reach will remain if not become better and it will bring down a lot of the operational costs.
He assured that people in CSI will not lose their jobs and that it will be a lock stock barrel kind of merger that will be happening.
He said the merger of CSI and BDBL is confirmed and the government has given the heads up but the people will not feel it has merged.
