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Druk PNB Bank
Druk PNB Bank Limited is a Bhutanese commercial bank, established in 2010 as a joint venture between Punjab National Bank of India (51 percent) and Bhutanese investors (49 percent). It was the first foreign-invested bank in Bhutan and the country's fourth licensed commercial bank, with branches in seven dzongkhag headquarters.
Druk PNB Bank Limited (DPNBL) is a Bhutanese commercial bank, headquartered in Thimphu. Incorporated in 2008 under the Companies Act of Bhutan and licensed by the Royal Monetary Authority of Bhutan, it began operations on 27 January 2010 with the opening of its first branch in Thimphu.[1] It is a joint venture between Punjab National Bank of India, which holds 51 percent of the equity, and Bhutanese promoters and the general public, who hold the remaining 49 percent.[2]
Druk PNB was the first bank in Bhutan with foreign direct investment, and entered the market as the country's fourth licensed commercial bank, after Bank of Bhutan (1968), Bhutan National Bank (1997) and T-Bank (2010). A fifth bank, the Bhutan Development Bank, was relicensed as a full commercial bank in 2010.[3]
As of recent reporting the bank operates seven branches: in Thimphu, Phuentsholing, Wangdue Phodrang, Gelephu, Paro, Trongsa and Samtse. Its product range includes retail and corporate deposits, working-capital and term loans, housing loans, vehicle loans, debit and credit cards, and remittance services to and from India through the parent's correspondent network.[2]
Establishment
The Royal Government of Bhutan opened the banking sector to foreign investment in the late 2000s as part of a wider liberalisation of the financial sector under the second Five Year Plan of the Royal Monetary Authority. Punjab National Bank, India's second-largest public-sector bank, applied to establish a Bhutanese subsidiary in 2008 in cooperation with Bhutanese institutional and individual promoters. Approval was granted by the Royal Monetary Authority later that year and the bank was incorporated under the Companies Act of Bhutan on 27 January 2009. Operations began exactly one year later, on 27 January 2010, with the opening of the head-office branch in Thimphu.[1]
As of December 2014 the bank's paid-up capital was Nu 449.7 million, distributed between Punjab National Bank (51 percent), Bhutanese institutional and individual promoters (19 percent), and the general public (30 percent) following a public offering on the Royal Securities Exchange of Bhutan.[3]
Operations
Druk PNB offers a standard range of commercial-banking products. Retail products include savings, fixed and recurring deposit accounts, housing and vehicle loans, education loans, and Bhutan-issued Visa debit and credit cards. Corporate products include working-capital finance, term loans, bank guarantees and trade finance facilities. The bank has used its parent's correspondent network to position itself for inward remittance flows from Bhutanese workers in India and the Middle East, and for trade-finance facilities supporting cross-border trade with India.[2]
The bank participates in Bhutan's national real-time gross settlement and electronic funds transfer systems administered by the Royal Monetary Authority, and is a member of the Bhutan Bankers' Association.
Regulatory environment
As a domestically incorporated commercial bank Druk PNB is regulated by the Royal Monetary Authority of Bhutan under the Financial Services Act 2011 and supporting regulations. The bank is subject to capital-adequacy, liquidity and prudential requirements common to all five Bhutanese commercial banks. The Royal Monetary Authority publishes consolidated banking-sector data in its annual reports and quarterly statistical bulletins.[4]
Position in the Bhutanese banking sector
Druk PNB is the smallest of Bhutan's five commercial banks by branch network and balance-sheet size. The Bank of Bhutan, with about 45 branches, dominates the deposit and lending market by volume; Bhutan National Bank is the second-largest by assets and a significant participant in syndicated lending to the hydropower sector. T-Bank and Bhutan Development Bank focus respectively on small and medium enterprise banking and rural credit. Druk PNB occupies a niche oriented to urban retail customers, India-trade corporates and remittance flows, drawing on its parent's network in India.[3]
References
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