December 26: Bhutan will soon have four new financial institutions. The Royal Monetary Authority (RMA) has issued in principle approval or green signal approval to four private and corporate companies to establish financial institutions. This was revealed at RMA’s 5th annual meeting yesterday.

The RMA officials say before issuing the in principle approval to set up banks, RMA conducted a detailed study on the feasibility of establishing new financial institutions in the country.

The Tashi Group of companies will be setting up a domestic bank, Druk Punjab National Bank will be a joint venture banking institution, the Bhutan Development Finance Corporation will be a specialized bank while Yangphel Enterprise will be an insurance company.

Euden Dema, the head of the financial institutions supervision division of the RMA said, 10 applications for new financial services were received by the RMA and were reviewed and assessed by an independent technical advisory committee.

The meeting also saw discussions on recent macroeconomic development including Bhutan’s balance of payment with India. RMA’s research and statistics showed inflation rate in the quarter half of 2008 climbed high to 8.85% due to increase in food and fuel prices.

The meeting also looked at performances of steel companies in the country and draft financial service act.