Starting January 1, Gorakh Rana has been appointed as the new Chief Executive Officer of Standard Chartered Bank Nepal, becoming the first Nepali citizen to lead the bank. With nearly three decades of experience at Standard Chartered, Rana previously served as the Deputy CEO. In an exclusive interview with New Business Age , Rana shared his insights on leading the country’s only international bank, the significance of a Nepali taking the helm, Nepal’s current economic and financial landscape, and the challenges confronting the banking sector. Excerpts:
What are your thoughts on being appointed as the first-ever Nepali Chief Executive Officer of Standard Chartered Bank Nepal Limited?
It is a privilege to be appointed as the first Nepali CEO of Standard Chartered Bank Nepal Limited and I would like to thank all stakeholders who supported me through the years including clients, regulators, our shareholders, friends in the media and mentors. This shift reflects the value addition that Nepali employees can provide to the overall business and operations of international companies in Nepal, the confidence in local leadership and dedication to fostering growth in Nepal’s banking sector.
I look forward to building on the bank’s legacy and continuing to drive meaningful progress for our clients, stakeholders and the community. This milestone is a testament to the opportunities Nepal offers for nurturing talent and leadership.
Many commercial bank CEOs in Nepal, including some of your peers, began their careers at Standard Chartered Bank. What motivated you to stay with the bank rather than move to another institution, especially considering the opportunities to lead other banks?
Standard Chartered has provided me with invaluable opportunities to grow professionally while contributing to Nepal’s financial development over the years. The bank’s global reach, commitment to sustainable banking, and strong core values have always deeply resonated with me.
I am truly grateful for the trust placed in me and for the chance to make a positive impact. The culture at Standard Chartered, with its strong emphasis on meritocracy, research, and ethical conduct, aligns closely with my personal beliefs. Working within an organization that is globally aligned yet locally committed has been profoundly fulfilling, offering me a platform to engage in transformative initiatives for Nepal’s progress.
How significant is Standard Chartered Bank’s presence in Nepal for enhancing the country’s reputation in international trade and payment systems? What unique contributions does SCBNL make to the Nepali banking sector?
As the only international bank in Nepal, we serve as a crucial link between Nepal and global markets. Our expertise in trade finance and cross-border payments allows businesses in Nepal to collaborate seamlessly with international partners, particularly in areas where we hold significant market share. Our presence in Nepal also enables us to offer these services more cost-effectively, leveraging efficiency and the scale of our operations. In terms of thought leadership and contributing to national priorities, we strive to apply our global expertise in areas that matter most. A recent example is our role as the Sovereign Credit Rating advisor to the Government of Nepal, demonstrating our commitment to supporting the country’s economic development.
Over the past three decades, several foreign banks have exited Nepal, and new ones appear reluctant to enter. Do you believe Nepal has become less appealing to foreign banks?
Nepal remains a market with significant potential due to its geolocation –sandwiched between two of the world's fastest growing economies, India and China – and at a BB- sovereign credit rating. While challenges exist, there are also numerous opportunities for growth and innovation. As the economy grows, I believe Nepal will become an increasingly attractive destination for global investors.
On the other hand, Standard Chartered Bank has continued its operations in Nepal, even after exiting seven countries in 2022. What factors contribute to Standard Chartered’s decision to stay in Nepal?
We remain dedicated to contributing to Nepal as an international cross-border bank, bridging the country with the global financial market. Standard Chartered Bank played a significant role in Nepal’s first sovereign credit rating.
Could you explain the bank’s involvement in this process? Also, what does the BB- (BB Minus) rating mean for Nepal?
We were honored to serve as the sole ratings advisor for Nepal’s first-ever sovereign credit rating. This milestone highlights Nepal’s commitment to establishing a strong financial reputation. The BB- rating reflects stability and positions Nepal as an emerging market with significant potential to attract foreign investment and foster economic growth.
Standard Chartered is still seen as a bank primarily serving affluent individuals and large corporations. What steps is the bank taking to connect with and support small and medium-sized enterprises (SMEs) and expand its customer base?
Small and Medium Enterprises (SMEs) are a vital part of Nepal’s economy, and supporting them is at the core of our strategy. Through tailored products and capacity-building programs, we are empowering SMEs to achieve their business goals, particularly through our Wealth and Retail Banking (WRB) segment. In addition to our work with corporates and affluent clients, we are committed to creating value for the broader business ecosystem. Non-performing loans (NPLs) in Nepal’s banking sector are increasing, and the International Monetary Fund (IMF) has expressed concerns about the accuracy of the reported NPL levels, urging a review of loan portfolios.
Has the NPL situation in the banking sector reached a critical point? How serious is this issue?
While the increase in Non-Performing Loans (NPLs) presents a challenge, at less than 5% in Nepal, we are still significantly below the levels seen in South Asian peers and other emerging markets. This also presents an opportunity to enhance risk management and operational resilience. Proactive measures, including improved credit monitoring and portfolio diversification, are already in progress, and the transition to Expected Credit Loss frameworks will further strengthen the financial sector.
The Nepali banking system often goes through cycles of liquidity shortages followed by surpluses, causing interest rates to fluctuate and affecting businesses. How do you perceive this recurring challenge, and what sustainable solutions do you think could address it?
Liquidity fluctuations, driven by changing economic landscapes, are a common occurrence in most economies. However, they also present opportunities for improvement within the financial system. Encouraging long-term savings, fostering greater coordination among stakeholders, and developing deeper capital markets are key solutions. I am confident that with these measures, Nepal’s financial sector will become more stable and resilient.
With banks increasingly focusing on promoting green financing and sustainable banking practices, how is Standard Chartered Bank Nepal contributing to the growth of green financing?
Sustainability is central to Standard Chartered’s vision, and in Nepal, we are driving green financing initiatives by supporting renewable energy projects and financing entities aligned with the UN’s SDGs. Our goal is to lead the transition to a low-carbon economy, in line with Nepal’s aspirations for a greener and more sustainable future.
Despite a reduction in loan interest rates, credit flow remains sluggish. What do you believe are the key factors behind this slow credit growth? It is said that the primary loan borrowers of banks are over-leveraged, which is hindering banks’ ability to issue new loans. What is your perspective on this?
The credit flow is gaining momentum, however there is a lag impact despite favourable macroeconomic metrics. This may reflect cautious borrower sentiment and increasing robust risk management requirements in the banking sector that would have a positive impact in the longer term for the economy. This presents an opportunity for banks to support clients with innovative solutions, enhance credit accessibility, and encourage investments in viable projects.
It is said that the primary loan borrowers of banks are over-leveraged, which is hindering banks’ ability to issue new loans. What is your perspective on this?
While the growth rate in credit has not reached the expected levels, several converging factors have impacted the economy, and these are being addressed by the authorities. We are already seeing signs of improvement and remain optimistic.
Recently, there has been a noticeable rise in property auction notices from banks. Has loan recovery become a major challenge for banks? The non-banking assets (NBAs) has increased by 72 percent in the last one year. How significant is the issue of NBAs for banks at this point?
The increase in property auctions and NBAs reflects the lag impact of credit demand in the economy, but it also highlights the importance of proactive management. While this presents a challenge, it offers an opportunity for banks to innovate recovery processes and enhance portfolio quality. I am optimistic that with improved risk management and collaborative efforts, we can transform this challenge into an opportunity for long-term stability.
