Agricultural Development Bank: A pillar of financial inclusion and modern banking services

KATHMANDU: Established in 1968 under the ADBL Act 1967, the Agricultural Development Bank Limited (ADBL) has played a pivotal role in advancing the agricultural sector’s production and productivity. Initially succeeding the cooperative bank, it absorbed the Land Reform Savings Corporation in 1973 and has since undergone various amendments, broadening its scope to include credit for small farmers, support for cottage industries, and engagement in commercial banking activities.

As a premier rural credit institution, ADBL has been a key contributor to agricultural credit supply, focusing on rural finance. Since 1984, it has expanded its operations into commercial banking, providing a comprehensive range of financial services.

The enactment of the Banks and Financial Institutions Act (BAFIA) brought all financial institutions under its umbrella, leading to the bank’s transition into a public limited company registered under the Companies Act, 2006. Licensed as an “A class financial institution” by Nepal Rastra Bank since 2006, ADBL boasts a glorious history spanning over 53 years and stands as one of the leading commercial banks in the country.

With a commitment to investment in agriculture, industry, trade, commerce, and households, the bank has garnered the trust of over 1.2 million satisfied customers. Operating across all seven provinces and 77 districts of Nepal through its extensive network of 278 offices, ADBL’s main motto revolves around promoting rural agriculture and uplifting productive and deprived sectors.

ADBL’s corporate conduct is guided by adherence to relevant legislation, codes of conduct, and standards of good corporate citizenship in Nepal. Emphasizing autonomy in operations, the bank conducts its affairs in an open and transparent manner. It prioritizes local resources for local development, striving to provide a balanced range of financial products and services that meet the needs of the rural population profitably and sustainably.

With a focus on professionalism, competitive pricing, reliability, and innovation, ADBL operates in accordance with best banking practices, maintaining financial prudence, and safeguarding depositor’s funds. It collaborates with employees to develop their capabilities, contributing to the bank’s success while fostering excellence.

The bank is committed to building mutually acceptable relationships with the government to improve living standards in rural areas while respecting best financial practices. It ensures that its activities contribute to environmental stability and overall improvement in living standards in Nepal, judging its success against measures such as profitability, portfolio quality, total deposits, geographic outreach, and public image.

The bank’s capital ownership structure reflects its robust financial foundation, with an authorized capital of Rs. 25,000,000,000, authorized equity share capital of Rs. 16,000,000,000, and authorized preference capital of Rs. 9,000,000,000. The issued and paid-up capital stands at Rs. 18,884,386,078, with 51% held by the Nepal Government and 49% by the general public, showcasing a balanced ownership structure.

This financial strength positions ADBL as a leading player in the banking sector, contributing to the nation’s economic development and the well-being of its diverse customer base.

The Ministry of Finance has commended ADBL for actively participating in various social initiatives under its institutional social responsibility. The bank has provided economic and physical support to those affected by natural disasters, including floods, fires, and earthquakes.

Initiatives encompass financial assistance for environmental conservation, disaster relief, construction and maintenance of various infrastructures, and social security allowances distribution in coordination with local bodies.

ADBL has established customer care centers and helplines, including a toll-free number (16600111110) and (01-4263387) during office hours, demonstrating its commitment to providing various services and support to its customers.

ADBL envisions itself as a Mass-based Complete Bank, committed to serving communities from urban to rural areas. This vision reflects a dedication to inclusivity and accessibility, recognizing the diverse financial needs across different regions. The bank’s Mission aligns with this vision, emphasizing its role in delivering comprehensive banking solutions that strengthen its extensive network.

By adopting a mission that prioritizes comprehensive services, ADBL underscores its commitment to providing a range of financial products and services that cater to the diverse needs of its clientele.

To operationalize its vision and mission, ADBL has established clear objectives. Firstly, the bank aims to provide quality banking services, emphasizing excellence and efficiency in meeting the financial needs of its customers. This objective underscores a commitment to customer satisfaction and reliability in service delivery.

Secondly, ADBL seeks to adopt a market-driven strategy, acknowledging the dynamic nature of the financial sector. By aligning its approach with market trends and demands, the bank aims to stay responsive and relevant in a rapidly evolving industry.

Furthermore, ADBL’s objective to obtain sustained and competitive returns on investment reflects a commitment to financial prudence and long-term viability. By ensuring that its financial investments yield competitive returns, the bank positions itself as a stable and reliable financial institution capable of contributing to economic growth.

Agricultural Development Bank Limited (ADBL) stands as a comprehensive financial institution offering a diverse array of banking services to cater to the multifaceted needs of its clientele. In the realm of remittance, ADBL facilitates both domestic and international transactions, providing a seamless and efficient channel for funds transfer. Beyond traditional banking, the institution extends its reach into non-fund banking services, presenting options such as Bank Guarantee and Letter of Credit to support various financial arrangements.

ADBL is at the forefront of modern banking services, offering a suite of innovative solutions to enhance customer experience. These include credit card facilities, Kisan Credit Cards tailored to agricultural needs, SMS banking for convenient communication, Visa Debit Cards for global transactions, Internet and Mobile Banking for digital accessibility, SMS Alerts for real-time updates, ASBA (Application Supported by Blocked Amount), ATM services, SWIFT transfers, Connect IPS for interbank transactions, ABBS service for hassle-free banking, Clearing Service, FOREX transactions, RTGS service, ADBL Demat Accounts for secure investment, and Visa Direct Service for international remittances.

In addition to these modern services, ADBL provides various other banking services, such as locker facilities for secure storage, gold and silver trading options, acting as a Market Maker, and engaging in government transactions. This holistic approach to banking services underscores ADBL’s commitment to being a one-stop financial solution provider, ensuring that its customers have access to a comprehensive suite of services to meet their financial, investment, and transactional needs efficiently.

ADBL offers a robust range of deposit and loan products to meet the diverse financial requirements of its customers. On the deposit front, ADBL provides a variety of options, including Savings Accounts, Current Accounts, Call Accounts, Fixed Deposit Accounts, Akshaykosh Accounts, Lakhapati Karodpati Dhamaka Fixed Deposits, and Co-operative Call Accounts. These products cater to the different preferences and needs of depositors, offering flexibility and competitive returns.

In terms of loans and advances, ADBL extends its support across various sectors. The bank provides Agriculture and MSME Loans to foster growth in these crucial sectors, Consumer Loans for personal financial needs, Corporate Loans for businesses, and Subsidized Loans to make financing more accessible and affordable.

This diverse portfolio of loan products reflects ADBL’s commitment to facilitating financial empowerment and contributing to the economic development of individuals, businesses, and communities alike.

Project Execution

The Rural Poor Stimulus Fund – Accelerated Private Investment in Agriculture (RPSF-APIA) is a pivotal initiative by the Government of Nepal, supported by IFAD and executed by Agricultural Development Bank Limited (ADBL). The project focuses on uplifting the livelihoods, resilience, and food security of impoverished rural communities.

Aligned with the Agriculture Development Strategy and MOALD’s vision, it seeks to amplify the benefits of economic growth for the poor, marginalized, and climate-vulnerable. Notably, RPSF-APIA addresses national agricultural priorities amidst the challenges posed by COVID-19, emphasizing food security, rural economic revival, and opportunities for returning migrants.

Over an 18-month period, the project targets small-scale producers, traders, and other stakeholders, aiming to minimize the impact of the pandemic on livelihoods. By expanding ADBL’s service platform, the project enhances farmers’ access to institutional financial services and agricultural market information.

With a significant focus on digitalization, RPSF-APIA strives to build resilience in agricultural finance systems, offering digitalized financial services through Kisan Credit Cards and Kisan Mobile Apps. This not only facilitates market access for farmers but also improves the efficiency of ADBL’s financial services.

The proposed project, dovetailed with the VITA program, catalyzes the digitalization of agricultural financial services in Nepal. It aims to provide modern financial tools to small-scale farmers, aiding in their recovery and enterprise rehabilitation.

This strategic exit plan ensures the sustained benefits for smallholder farmers, modernizes ADBL’s financial services, and enhances institutional sustainability. In the long term, the initiatives sparked by the project and continued under VITA significantly contribute to enhancing the resilience of smallholder farmers in facing future crises akin to COVID-19.