| Username |
Post |
| lover boy |
Posted
on 31-Jan-02 11:11 AM
oops error in posting the subject
here is the right one..
Deloitte Touche Tomatsu takes over RBB management
KOL Report
KATHMANDU, Jan 31 - International consultancy firm Deloitte Touche Tomatsu (DTT) has signed a contract with Nepal Rastra Bank (NRB) to take over the management of Rastriya Banijya Bank (RBB) for two years.
The contract was signed in Kathmandu Thursday by Rajan Singh Bhandari of NRB and Robert J F McPhail, a partner of the DTT. Under the terms of the signed contract, the DTT would work under direct supervision of the Board of Management of the RBB for a consultancy fee of US $ 5.78 million.
Bhandari told the press that the new management has the authority to close some of the branch offices without bringing change on the service offered by the branch office to its customers. "The new management cannot go for force retirement of its employees," he added. However, the management can bring some special schemes for the voluntary retirement.
On behalf of new management, McPhail, said that the company would concentrate on understanding the problems for the initial two months and then implement its reform strategies accordingly. "The company has already worked in several economies and the experience would help for attaining the success of this project," he added. (rk)
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Would love to hear your comments: It was a big check to write so my assumption is
1. Do we have incapable financial pundits?
2. Was this a fishy commission making deal?
3. WHY DTT?
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| kd |
Posted
on 31-Jan-02 11:40 AM
is the 5.78 million dollars in consultancy fees worth it? or is that just a waste of money? if consulting is what they need cannot they get some equally competent firms in india for a fraction of the cost to do the job? or will that seem like we are selling our country to the 'dhotis'?
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| ashu |
Posted
on 31-Jan-02 12:18 PM
Finally, the Nepal government, together with the Ministry of Finance, has done
one thing right. It has accepted that outside, non-political experts with hard-nosed business sense -- and NOT political appointees with zero fiancial savvy -- are important to turn the RBB around to put it on the path to profiability.
RBB had become such a sick entity and such a drain on public resources that it
was either this or liquidation, which would have been a lot costlier.
DTT Worldwide has a capable Nepali affiliate called BRS Neupane & Company.
In my professional dealing with DTT's India and Nepal offices regarding
the restructuring of another autonomous public entity, I have found
the DTT people (both Nepali and Indian professionals) sharp, capable
and competent and, yes, damn expensive. Then again, top-level
business consulting IS an expensive service no matter where you get
it.
There was a global bidding for this RBB contract; the entire selection process was
fair and transparent. Now, it's up to DTT to prove that it can live up to its TOR, and it's up to Nepal government (the client) to make sure that it is actually
getting what it is paying for.
Disclosure: Just to be clear, I have no stake whatsoever in this whole DTT-RBB affair, but am watching this with great interest.
oohi
ashu
ktm,nepal
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| !@0 |
Posted
on 31-Jan-02 12:55 PM
Which bank do you prefere to bank Nepalese, Indian, or US ? You got the answer.
That is why RBB decided to go for DTT.
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| sunakhari |
Posted
on 31-Jan-02 01:04 PM
kd: from a laymans POV
I'm glad they are hiring a reputable firm rather than relying on the janney manney people with shady links. HIGH TIME!
And if they can afford to hire one of the best, why would they settle for anything less.
I think its an excellent step. Shows someone is serious about setting things straight from day one. And it doesn't necessarily mean we wouldn't have Indian consultants, in fact, it would be a surprise not having quite a few working on this project considering how many well-educated Indians are out there in every field. Hell, the head of Mckinsey was/is an Indian - Rajat Gupta.
But Ashu, maybe you can shed some light as to why they chose DTT over others - any (hidden) agendas you smell?
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| cyberpal |
Posted
on 31-Jan-02 01:13 PM
I think Aurther Anderson is(was) aslo considered a reputable firm until the enron scandal.
I don't see why they couldn't have hired some Asian branch of the big five instead of doling out $5 mil. It seems a little excessive.
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| ke cha |
Posted
on 31-Jan-02 04:05 PM
I think it's definitely worth it. For us normal folks it does seem like a lot of money. But considering the fact that the RBB was losing so much money, I think this can be considered a sound investment.
IT will definitely be good to see what strategies they put forward. I am looking forward to it.
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| HoChiMinh |
Posted
on 31-Jan-02 04:31 PM
Over $5 mil - for a country like Nepal. Can some one quote me the budget of this fiscal in Nepal? I know ten years ago, Nepal's budget was less than the yearly budget of some of the Universities in the US - around 950 mil.
By its nature, auditors can only recommend changes but can't or should not participate in implementation. Moreover, we all know what is wrong with RBB. When politicians and power brokers meddle in banking process and decisions, system never gets a chance to assert itself. One does not need to look across the continent - just look at other private Banks in Kathmandu.
I remember when Sports Council brought in a highly reputable German football coach for the national team in preparation for one of the Asian Games. The result - just as bad. We don't need to pay someone to tell us what is wrong when we all know the problem - unsecured loans, over employment, under qualified employees etc.
HoChi
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| Taat |
Posted
on 31-Jan-02 05:07 PM
Dear Friends:
US$ 5.79 mil is a little less than 45 crore Nepali Rupees, which is actaully not a whole lot for a bank like RBB.
Himalaya Bank raked in over 27 crore last year, similarly Nepal Bangladesh Bank raked over 17 crore and I think it was SBI bank which raked in over 40 crore in profits.
Considering the size of RBB, the deal is cheap, however the work of these proffessionals is yet to be seen.
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| loverboy |
Posted
on 31-Jan-02 06:00 PM
aashu thanks for the clarification.
I hope they can get their act together. I will be closely following this story to see how it's going to shape out. One thing I hope from this deal is utilization of local expertise (technology, consulting, research and development) so that % of $$ stays within the country. Do you have any ideas on what kind of opportunities it can open for local people??
Man if it requires that kinda money to get its act together, it must be in a serious trouble. If I had my $$ with them I would think twice about my investment objectives.
Taat, when you spend 100% of your profit I think it is a serious issue. I am still having problem digesting the $$$ figure.
On the positive note, we might not have to hang on to those "sim sim rajako pala ko" tokens with a voucher at the cashiers counter.
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| Taat |
Posted
on 31-Jan-02 06:08 PM
loverboy: RBB's potential is beyond 44 crore they are spending. If they can get their act together and rake 88 crores in profits, why not spend 44 crore? Its a lot of money, but again its the biggest Bank in Nepal.
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| kd |
Posted
on 31-Jan-02 09:26 PM
i agree with you
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| ashu |
Posted
on 31-Jan-02 10:25 PM
Hi Loverboy,
Let me assure you that the Nepali professionals who are on this DTT team are of the highest quality: well-respected bankers, seasoned chartered accountants and so on. For professional reasons, I would NOT like to quote their names here. I mean, yes, I want to share relevant info with you all but my priority is to be scrupulous about not mixing my professional life with my Web life in ways that
puts me in a compromising situation. I hope you understand.
Anyway, this whole DTT-NRB saga also brings up a larger point: As more and more American/Western global consulting/auditing firms start offices in India and hook up with affiliates in Nepal, some of them are bound to -- as it is already
happening -- pick up private-sector and public-sector clients in Nepal.
And when they do that, they are bound to hire well-respected local Nepali
experts.
And when that happens, that's a win-win situation for Nepali experts:
I mean, you get to stay in Nepal,
you get to work with top-notch non-Nepali and Nepali peers on challenging assignments, and
you get paid damn well.
What more would you possibly want except perhaps keeping your week-ends free to play golf in Gokarna?
Seriously.
Think about that.
oohi
ashu
ktm,nepal
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| Horizon |
Posted
on 01-Feb-02 10:48 AM
Hi Ashu,
RBB restructuring is a common knowledge and is very well taken by the majority. So, why should there be any secrecy when it comes to the leadership team especially when they are so well compensated? RBB being a State owned institution, we (public) have a right to know the responsible parties (including Nepali) so that we can hold them accountable in future. Thus, you naming them should not put you in any compromising position but I guess you already used your judgment. Besides, it is not very difficult to find out.
I read that the new RBB Board would be predominantly from NRB? Who is driving this from NRB? Hope it’s not Dr. Rawal with all 0% Central Banking experience before he became the Governor. Former Chairman of RBB and now the Governor, would he have any interest in past financial irregularities? Isn’t this ironic?
I believe Ram Babu Panta is running the show from NRB. Now the question is who are other well-respected bankers involved and hope Ashu will reconsider his decision and name people.
RBB’s transition was relatively smooth but how about NBL? With government owning just a part of it, how is it’s restructuring looking and when can we expect that to happen?
I believe that Financial Sector Reform Project initiated by NRB is an aggressive step in the right direction and let’s hope we see the results.
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