Mr. Ajaya Kumar Mishra is the Chief Executive Officer (CEO) of Siddhartha Development Bank Limited (SDBL) since Ashad 2072. Before coming to SDBL he was CEO of Prudential Finance limited for seven years. He has more than two and half decade of professional experience in Government, INGOs, Media and Banking Sector. He is also involved in teaching and training profession for a decade. He is also currently pursuing PhD in leadership at Kathmandu University.
- Please give us overview about Siddhartha Development Bank Limited.
Siddhartha Development Bank was established in the year 2056 in the western development region of Neal. We are national level development bank. Today it has total of 18 branches. All of our branches are profit making branch. Recently, we have signed Memorandum of understanding with Ekata Bikas Bank ltd (EKBL) and Nepal Aawas Finance Limited. The merged entity will have a paid up capital of Rs 1.04 arba.
- Could you please tell us more about the merger process between Siddhartha Development, Ekata Bikas and Nepal Aawas?
We are merging with Ekata Bikas Bank for the business performance. The business performance of Ekata Bikas is excellent in the western region of Nepal. Likewise, we are merging with Nepal Aawas Finance to increase the paid up capital. We plan to complete both merger processes by Magh 02, 2072.
- During the merger process the trading of scrips has been halted. How confident are you that the merger will complete within Magh 02, 2072?
I am confident that we will start joint operation of merged entity by Magh 02, 2072. We are proactive in this merger process. We have implemented a schedule to sort out the process of staff integration, staff benefit package, Due Diligence Audit (DDA), Board Structure and other miscellaneous issues. We are waiting Letter of intent (LOI) from the Nepal Rastra Bank. By the time we get LOI, we will have all prerequisite work completed. Thus, merger process will complete as scheduled.
- Recently, we have seen some merger process being called off after halting trading for months. Will there be an issue with this merger?
No. There are two reasons for merger process to be called off which are Swap ratio and staff integration. Non Performing Loan (NPL) of Ekata is well below 1%. We do not expect to discover any new dirty laundry in Ekata's book as it is merely 3 years old. So there would not be any alarming thing in DDA. Government of Nepal has invested in Nepal Aawas finance where NPL is around 1% with portfolio of Rs 70 crore. We are only expecting nominal value changes, if any, in DDA. So the swap ratio should not be a problem in this merger process.
We already have started the process of staff integration. Earlier in the month we had training for staffs of Siddhartha (Development Bank) at Butwal where the staffs of Ekata (Bikas Bank) also participated. Furthermore, I have visited all branches of Ekata Bikas Bank during that training.
- Siddhartha Development bank is aggressively merging other institutions. The merging process halts the trading of shares in NEPSE. So, are you planning to merge with more institutions?
First of all, trading halt is legal requirement, beyond our control, in merger process. We will not go into merger process for this fiscal year. So, our shareholders should be able to trade Share s in NEPSE after we start joint operation from Magh 02.
We are looking for acquisition of smaller institutions from next fiscal year. In acquisition the trading is only halted of smaller financial institution being acquired for short period of time. We could not go for acquisition this time as we do not have that mandate from our shareholders.
- If Siddhartha Development were to acquire more financial institutions as planned, will the percentage of right and bonus share planned in capital plan of the bank diminish?
No. The acquired entities will be in additional to the right and bonus share planned in capital plan of the bank. So our bank has paid up capital well above the minimum requirement of Rs 2.5 Arba.
- What kinds of financial institutions are you planning to acquire?
We want to acquire financial institutions in the eastern region of Nepal where our presence is nominal. So, our focus would be expansion of our services to the eastern region of Nepal.
- As all BFIs are handing out dividends, what are the plans of Siddhartha Development Bank?
We have not been able to give out any dividend in last six years. We have proposed a bonus share of 11% this year. The merged entity plans to give dividend of 20 % next year. We will be giving dividend to shareholders every year from now on. So, in this respect the bank is stable, stronger and better than ever.
- The current Non Performing Loan (NPL) of Siddhartha Development Bank Stands at 4.03 %. What are your plans to get control on NPL?
We are targeting to bring down our NPL between 1.5% and 2% by the end of Poush 2072. The NPL of all the branches of Siddhartha is below 0.5% except the Head office Branch. So, this lowering of NPL will be done directly under my watch at this Head office. Furthermore, when we publish the financial report of the merged entity at the end of this fiscal year our NPL will be below 1%.
- What are the unique services that Siddhartha Development Bank is providing to its customer?
Our Customer base includes from individual to big corporate houses. We have been catering their need for long period of time. Siddhartha Retirement Fund is one of our unique products with more than 10 thousands members from various organizations. It is a tax exempt account with benefits like of Employee Provident Fund and Citizen Investment Trust. The other unique program we have is Siddhartha Trust Remit which is providing excellent service in the field of remittance.
- What kind of banking product can we expect from Siddhartha Development Bank?
We have just launched "Siddhartha Surakshit Ghar Yojana" in partnership with Prime Life insurance Company Ltd. We have also introduced Taxi Loan for the new taxi owners in the valley. This Taxi loan is processed within three business days. We are also exploring the possibility to tie up all kinds of loans with insurance plans. Besides, we are working to get discount at hospitals for our member of Siddhartha Retirement Fund. This program is expected to be launched by the end of Kartik, 2072.
- What message do you have for your investors through our platform?
Siddhartha Development Bank has become stronger, capable and better in recent months. The investors who were deprived of dividends for six years will be able to get handsome dividend each year from now on. I would like investors to have confidence in our bank as we compete with other bank and financial institutions to become the best development bank in the nation.
