21st August, 2013

Press Release


Press Release No. DHI/M&PR/1c/2013/227

Thimphu, 16 August 2013: After having established the Bank of Bhutan Ltd. in 1968 pursuant to a Royal Proclamation, an agreement was executed between the Royal Government of Bhutan and the SBI in 1972 enabling SBI participation in the capital and the management of the company. This agreement was renewed/replaced each time upon expiry between the Ministry of Finance and the State Bank of India.

With the creation of DHI, the shares held by the MoF in BOBL were transferred to DHI. Upon the expiry of the previous agreement between MoF and SBI, in consultation with the MoF, a new shareholders' agreement was proposed and executed between DHI and SBI on 16 August 2013 replacing the previous arrangement.

The new agreement takes into account the changing business environment and sets the foundation for joint ownership of the Bank on commercial principles within the existing legal framework. The parties have done away with the need to periodically revise the agreement, and provided the framework for more deeper and meaningful collaboration between the Bank of Bhutan and SBI. This intent was captured and confirmed between the Bank of Bhutan Limited and the SBI on the same day through a Memorandum of Understanding executed between BOBL and SBI.

Dasho Karma Penjor, BOBL Chairman said "signing the shareholders' agreement is a concrete example of a long-lasting Indo-Bhutan friendship and further strengthens BOB's close partnership with SBI. The support from SBI at this time, when the Bhutanese economy is facing challenges, is paramount and BOB looks forward to more collaboration with SBI and more access to its immense resources"

Mr. Raghavan Karthikeyan, Chief General Manager, SBI said "relationship between SBI and BOB needs to be renewed. Today IT plays a huge role and SBI with huge IT infrastructure can collaborate in this area and work closely to turn ideas in to actions".

Mr. Karma Yonten, CEO, DHI said "SBI is not just a shareholder but a potential partner who can take BOBL forward. Bhutanese banks are a bit behind compared to the Indian banks and BOB can learn substantially from SBI resources".

For more information please contact: 
Media & PR Unit, DHI 
02-336257/58 ext 145