BDBL’s capacity to provide basic financial services is its unique selling point

Management: The government has not reversed its decision to hand over operation and management of the community centres from Bhutan Post to the Bhutan Development Bank ltd (BDBL).

The opposition party, in a press conference held on January 21, had said that the government should reconsider its decision, on grounds that quality of services offered at the community centres would deteriorate.

Information and communication minister, DN Dhungyel, said that the decision to transfer management stands for the moment.  Lyonpo added that any reversal of decision or not would be made by the cabinet.

The minister met with the finance minister, representatives of Bhutan Post, BDBL, and the Department of Information Technology and Telecom, to discuss modalities of the transfer, yesterday.

It was determined at the meeting that between one to three months will be given to Bhutan Post and BDBL to allow for the management transfer to take place.  During that time, Bhutan Post will continue to provide whatever services are currently offered at the centres.

The minister acknowledged the opposition party’s argument that having BDBL represent other financial institutions, while also managing non-financial services, may present a conflict of interest situation.

The services of other financial institutions like Bank of Bhutan, Bhutan National Bank, the Royal Insurance Corporation of Bhutan, and the National Pension and Provident Fund, which are currently offered at some community centres, will continue to be provided at the centres after management is transferred.

“There could be conflict of interest in the initial phase, but the very idea of the government to transfer community centres from Bhutan Post to BDBL is to give the basic financial services, which are required by the people,” he said.

Lyonpo pointed out that BDBL is a state-owned enterprise and mandated to reach rural communities.  He said that financial institutions, like Bank of Bhutan and Bhutan National Bank, have to determine their locations based on economic viability.  He added that, if the commercial banks want to introduce their services in more community centres, BDBL would not block the move.

It was also pointed out that rural communities are more in need of financial services currently, rather than a variety of them. “Today we’re talking about having a basic service, not a choice; choice could be given once the basic services are covered,” said lyonpo.

Lyonpo Dhungyel denied that the management transfer is to meet the ruling party’s pledge of a bank in every gewog.  The opposition party had made this argument during their press conference.

Lyonpo said that the primary focus is not on fulfilling the pledge, but to provide the financial services that are required and necessary for the people. “How the government decides to give those services to the people, in line with the norms, is the government’s prerogative,” he said.

The opposition party had also pointed out that, as per the agreement between Bhutan Post and the government, the former would hand over management of community centres back to the government only if business failed “drastically”.

While many reports that the community centres were being underutilised have been published, there were some positive developments occurring.  For one, pensioners were able to reduce significant travel time and costs by collecting their pensions from community centres.

“In general, out of the 187 odd community centres constructed and in operation at the moment, it is viewed, that they aren’t optimally utilised,” said lyonpo Dhungyel.

Other services, like 45 G2C (government to citizen) and G2B (government to business), although demand was limited to only between 4-5 of these services, printing, scanning, photocopying, among others, are also available at the centres.

“BDBL may not be comfortably doing all those things that were done by Bhutan Post but it won’t be impossible for them to do it as well,” said lyonpo Dhungyel.  He acknowledged that Bhutan Post had made improvements for the community centres, and that it was not because Bhutan Post had failed in its task that a management transfer is taking place.  He said that it was because the government is of the view that BDBL will do a more efficient job as it would be providing critical financial services that people are more in need of.

Lyonpo also pointed out that Bhutan Post would now not have to divert resources to the community centres, and rather focus on its core businesses.

The minister also said that Bhutan Post would be refunded for the costs it had incurred above the subsidies provided by the government.  Bhutan Post was provided Nu 28M to run the centres between 2012-16.  In a recent letter to this newspaper, the agency pointed out that this subsidy ran out mid-way last year, and it spent an extra Nu 12M for the operation of the centres.

It has not yet been decided for how long BDBL will operate and manage the community centres once it takes over. Lyonpo Dhungyel said that this would be worked out once modalities for the management transfer are finalised.

By Gyalsten K Dorji