NRB to get tough on commercial banks
Depositors’ interest, economy not to be hurt

By Ram Sharan Sedhai & Bijaya Ghimire

KATHMANDU, Dec 18 - Nepal Rastra Bank (NRB), the central bank, has enlisted most of the commercial banks against which it is set to take action for violating the directives, rules and regulations that govern commercial banks.

NRB prepared the list of these commercial banks after monitoring their activities. The list has been submitted to the governor and in case some complex problems arise, they are to be resolved by the meeting of the NRB board of directors, said a source.

Board of directors of those commercial banks who have borrowed an amount far bigger than their investment in the banks, and banks functioning as private companies despite being licenced as public limited, are some of those which will face punitive action. There are also banks which have flouted the directives of the central bank despite repeated warnings.

However, depositors’ interests, and the overall national economy, would not be affected while measures are taken against these banks. The step is being taken with a view to ensuring depositors’ interests and cultivating a healthy banking system, said a high-level source at the NRB.

The existing laws do not allow any board member to borrow from their respective banks, but some of them have been borrowing huge amounts under different names, says an official of a commercial bank.

However, the enlisted banks will be given a chance for clarification before bringing them to the book. The NRB has already sent some warning letters and some are in the process.

Governor Dr Tilak Rawal talking to The Kathmandu Post recently had said that the central bank would get tough on those commercial banks which are not functioning as per banking directives, rules and regulations.

International financial institutions like the World Bank and the International Monetary Fund (IMF) have been saying that the monitoring mechanism of Nepal’s central bank has remained weak.

The inspection committee has recommended to forbid dividends distribution, to bar collecting deposits and investments, and to halt all banking transactions. It has also suggested revoking even the licence of some of the banks depending on their degree of violation.

"Annulling the licence is an unpopular step and we wish banks do not create a situation in which we will be forced to cancel their licence. However, the number of such banks is almost non-existent," said the source.

According to the source, except for Standard Chartered, Nepal Indosuez and one more private commercial bank, all the rest are in the hit list. But only mild action awaits most of the banks.

Altogether 15 commercial banks are in operation now.

The central bank took action against the Lumbini Bank a couple of weeks ago. More recently, the NRB had barred two banks from distributing their dividend and bonus on the ground that they had not did not have the required paid-up capital of Rs 500 million.

Further, the NRB last week published a notice asking some banks not to issue public shares as per their commitment.

Nepal Bank of Ceylon, Lumbini Bank, Kumari Bank and Machhapuchchhre Bank have not issued public shares yet.

The central bank began pushing forward with the monitoring process after KPMG Barnett, an international auditing firm, announced the Rastriya Banijya Bank and the Nepal Bank Limited, the two major commercial banks with government stake, as "technically insolvent" some one and a half year ago. Then the central bank began closely monitoring the private commercial banks too.

The central bank had introduced directives to commercial banks since this fiscal year, with a view to better manage the commercial banks. Though the NRB is adopting a more flexible monetary policy in the present situation, this does not mean that the directives would be removed, said an NRB official.

Frequency row delays cheaper cell phone

KATHMANDU, Dec 18 (PR)– The ongoing row between the Ministry of Information and Communications (MoIC) and Nepal Telecommunications Authority (NTA) over the allocation of frequency band has delayed the distribution of cell phones by the private company, Spice Cell Nepal.

Market watchers say this is not only a deterrent to private companies entering the cell phone market in the country, but also in selling the phones at a competitive price.

A high level official of Spice Cell Nepal says that the company has submitted all the required documents in order to acquire the licence to operate cellular mobile phone throughout the kingdom. But it has not yet got the licence due to the row between the Ministry and the NTA over the allocation of frequency band, he said.

"We will begin distributing cell phone connections within three months of acquiring the licence and will provide the service at almost half of the current price," claimed a senior official at Spice Cell Nepal, requesting to be unnamed.

The licensing of the company has been delayed over seven months after the Telecommunications Employees Association of Nepal (TEAN) filed a case with the Supreme Court on December 28, 2000, naming Khetan Group, the MoIC, NTA and NTC as defendants.

The petition challenged the government’s decision to grant the license to a second operator, Khetan Group, arguing that this violated the Telecommunications Act, 1997. The Court on August 7, 2001, ruled in favour of the Khetan Group.

NTA officials citing the licence clauses say that the Authority is supposed to issue licence to the applicant only after it receives the frequency band. Kailash Prasad Neupane, spokesman at the NTA says, "NTA issues licence only after an applicant gets the frequency band as per the annex 4, clause nos. 5 and 7 of Telecommunications Regulations 1998."

Explaining the procedure, Neupane said that while issuing the licence, the Authority has to fill in a form that requires the specification of the frequency band that is allocated by the Ministry. What the NTA can do is to request the Ministry to allocate the specific frequency band to such an applicant, he added.

Clause 49 of Chapter 11 of Telecommunications Act 1997 states that there shall be a Radio Frequency Policy Determination Committee for the purpose of determining the policy relating to radio frequencies and their allocation, which is headed by the Minister for Information and Communications.

However, officials concerned at the ministry say that allocating frequency band to the company is the duty of the NTA as the Request for Proposal Document (RFPD) clearly mentions the fact.

Prabhakar Adhikari, Chief of Frequency Management and Technology Analysis Division, says, "The NTA’s RFPD clearly states frequency band allocation and its fees formulae. There is no confusion surrounding the allocation of frequency band to the company. So what else has the Ministry got to do?"

Spice Cell Nepal Pvt Ltd is a joint venture between Spice Cell India and Khetan Group, which was selected through a competitive bid to operate cellular mobile phone based upon Global System of Mobile Communications (GSM-900) on November 1, 2000.

Khetan Group has 40 per cent stake in the venture and Spice Cell India owns the rest. The company has said that it would begin its operation from the Kathmandu Valley, which targets 50,000 subscribers in the first year and plans to expand the service at other major cities outside the valley in the years to come.

Govt working to sell back encroached land

By Binaj Gurubacharya

KATHMANDU, Dec 18 – The 1,859 ropanies of land in the Kathmandu Metropolis, which was declared by the government as illegally encroached, is being "sold back" to the encroachers once the modalities are worked out.

The land, which is valued at billions of rupees, was declared by a government committee headed by former secretary at the Land Reforms Ministry Ram Bahadur Rawal in 1995 as illegally encroached by these people and a freeze ordered on transaction.

"The ministry is working on giving back these land to these people for a price fixed by the government. This would ease up the situation for many people who have not been able to sell their land," said Minister of State for Land Reforms Ram Janam Chaudhury.

The ministry is reviewing the 1995 report and a decision is expected soon from the government. These lands are valued anywhere between Rs. 500,000 to Rs. 12 million per ropani depending on the location.

Officials say that the valuation are just minimal amount and most of these lands are sold for as much as twice the valuation specified by the state.

A task force had also been constituted after the committee furnished the report recommending the "sell back" programme, however, the recommendations were never implemented until now.

Sale of these lands to these people would mean billions of rupees in revenue for the government and also beneficial for these people who will be able to continue transaction of their land once the freeze is lifted.

Some of these people have had their entire land frozen even if they have encroached just a small piece of it and the rest of them had been in their possession for years even before that. And many people who had bought these types of lands from previous owners had also been hit by the freeze.

The report says that these lands are mostly located in prime areas like Naxal, Lazimpat, Baluwatar and even Hanumandhoka which could bring the government lot of money.

Minister Chaudhury said that If the people who are currently holding on to these lands fail to come up with the sum, then it would be auctioned off in public and the money transferred to state coffer.

Those lands with archeological or religious values like the land encroached from temple and medieval courtyards will not be auctioned, instead they would be restored to their original status.

Much of the land around temples and those owned by Guthis or trusts have disappeared as they continue to be encroached by individuals.

The 1995 committee had made comparison between the land survey done in 1964 with the latest one done in 1985 of the Kathmandu Valley. Besides summing up and showing the exact locations of the encroached lands, the committee has also pointed finger at the Department of Land Survey for flaws and mistakes in their work.

"The government should have the courage to either buy the land or chase these encroachers away. This action would not only be beneficial in monetary terms but would also send a message in the mass about consequence of encroaching public land," said Rawal, who had headed the committee. "Most of the encroachers go unpunished at present."

Heaviest security yet for 11th SAARC Summit

By Seema A. Adhikari

KATHMANDU, Dec 18 - As the deadline for the Eleventh South Asian Association for Regional Cooperation (SAARC) Summit inches closer, police officers here say they are leaving nothing to chance to ensure maximum security to the visiting dignitaries.

Given the crisis situation in the country, and the daring attack on the Indian Parliament last Friday, the security officials are taking unprecedented measures to make the capital a safe venue for the January 4-6 Summit.

"This is the heaviest security ever due to the world overall situation, the recent attack in the Indian Parliament, the uneasy situations in Pakistan and Sri Lanka and the present crisis state-in Nepal," said the officials of the Armed Police Force on condition of anonymity.

The Birendra International Convention Centre and the probable places where the VIPs will be put up are already heavily guarded by the Armed Police Force. "Until last week there were only a few police men guarding the Summit venue but presently we have increased the number," said an official.

Officers at the Valley Police Office say they are prepared for all eventualities. "Although presently the security is really tight, it will be further tightened in the coming days for the Summit," says DIG Om Bikram Rana at the Valley Police Office.

Security will be the tightest at the places where the VIPs are staying, as also at the Summit venue—Birendra International Convention Centre. DIG Rana, however, stating security reasons, declined to disclose the number of police personnel who would be deployed, and the places where the VIPs will be staying.

Apart from the regular police force, including the traffic section, the Armed Police Force, too, will be manning the security arrangements. The Royal Nepal Army will also be helping in the preparation.

Traffic would be curtailed during the Summit days, says Keshav Prasad Baral, Senior Superintendent of Police at the Valley Traffic Police Office (VTPO). In an interesting step, the VTPO says public vehicles with odd and even number plates will have to ply on alternate days during at least six days ahead and during the Summit. The heavy vehicles and slow movement vehicles will also be totally banned for ten days starting December 30.

The roads leading to the Summit venue as well as VIP lodgings from the Tribhuvan International Airport will be totally blocked on and off during these days.

"All the security officials concerned—the regular police, VTPO officers, Royal Nepal Army officers, the officers of the Armed Police Force are busy finalising the security measures," said an official at the Police Headquarters, Naxal.

Two civilians, three Maoists killed in separate incidents

Post Report

KATHMANDU, Dec 18 - Two civilians and two Maoists were killed in separate incidents in three districts on Monday, say reports received here today.

A group of armed Maoists on Monday evening knifed two persons to death in two separate incidents in Hansapur Village Development Committee, Chief District Officer (CDO), Kashinath Marasini, here said.

The persons who were killed by the rebels have been identified as Surya Prasad Dawadi, 72, a Nepali Congress cadre from Kafaldanda village (VDC-5), and Shiva Prasad Adhikari, 28, a teacher at the local Mancha Kanya High School of VDC-1.

CDO Marasini said that the rebels entered the victims’ residence and slashed them to death with khukuris. Septuagenarian Dawadi died instantly, and Adhikari breathed his last while undergoing treatment at the Bhacchek Health Centre on Monday night.

Dawadi’s wife, Laxmi, also sustained serious injuries when she attempted to protect her husband. The injured Laxmi has been airlifted to Kathmandu for treatment, the CDO said.

Deceased Dawadi held the post of Pradhan Panch (equivalent to VDC Chairman) during the Panchayat system for a long time, and later joined the Nepali Congress after the restoration of democracy. He was also the Nepali Congress regional member of Constituency No. 2 of the district.

Meanwhile, our reporter from Surkhet in the mid-western region says that one Maoist guerrilla was killed on the spot by the security personnel guarding the regional broadcasting centre of Radio Nepal, on Monday night. The rebel was wearing a combat uniform.

The police said that the dead rebel was among five men who tried to storm the station from its southern end. The others fled when the security personnel opened fire at them. The police have recovered socket bombs and an electric wire from the deceased Maoist.

Another armed Maoist was shot dead in the far-flung district of Mugu when he attempted to flee a joint army-police operation in the Ghantelek area, said a Ministry press release today. The security forces recovered two guns from the site.

Our Pokhara-based reporter quoted the RNA officials as saying that an armed Maoist was shot dead when he tried to escape from the army’s search operation in the northern part of Gorkha district on Tuesday afternoon. The unidentified Maoist was killed by the RNA personnel while searching the suspected houses in Laprak and Ghaprak VDCs.

The army also seized 69 country-made guns and Maoist literature from those houses in the last two days. Officials said that three Maoists were arrested in Pokhara.

Meanwhile, a report from the Manthali, the district headquarters of Ramechhap, says that two person sustained injuries when a socket bomb went off at a building of the Royal Nepal Airlines Corporation (RNAC).

The persons injured in the explosion have been identified as Hari Khadka and Sambhu Khadka, both from Dolakha. The injured were staying in a nearby hotel when the explosive hit them. They are undergoing treatment at a local health centre.

Deputy Superintendent of Police, Samba Raj Basnet, said that the blast caused a minor damage to the RNAC building. Security has been beefed up after the incident, Basnet said.

Meanwhile, soldiers of the Royal Nepal Army (RNA) on Monday, recovered 52 different types of guns, several fire-arm magazines, gun barrels, different types of bombs and explosives, ammunition, communication sets and combat dresses while carrying out a search operation in the Budhagaon area in Rolpa district, states a press release issued today by the Defence Ministry. The release said the seized fire-arms had been looted by the rebels from the army barracks in Dang on November 23.

The release also adds that the army men confiscated altogether 20 guns—18 from Gorkha and two from Dolakha districts—on Monday.

Is all quiet on the home front?

By Suman Pradhan

KATHMANDU, Dec 18 – When the late Indian Prime Minister Indira Gandhi imposed emergency rule in 1975, the motive was to save her seat in parliament. A judge in Allahabad, who was weighing an electoral malpractice case against her, had just ruled against the Iron Lady.

The use of draconian state powers for personal gains has weighed heavily on Mrs Gandhi’s legacy, a leader who governed India for two tumultuous decades. Historians today cite the 1975-77 emergency as the darkest chapter in India’s democratic history, and depending on whom you listen to, Mrs Gandhi as one of the more sinister of the nation’s leaders.

In Nepal though, nothing of the sort has happened. Prime Minister Sher Bahadur Deuba imposed emergency rule late last month to combat Maoist rebels who had begun to rain havoc in rural districts. Those indiscriminate killings of policemen, soldiers and innocent civilians handed the government a potent and undeniably justifiable grounds to impose the emergency.

History will someday judge Mr Deuba for it, whether or not he was right in using the ultimate state weapon. But history unfolds over time, not in a week or month. A lot, in any case, will depend on the outcome, whether the government succeeds in its objectives or whether the emergency only fuels the sense of alienation so rife in the impoverished rural districts.

For now though, the going has been quite smooth for the Prime Minister. Just how smooth can be gleaned from these facts: First, the international community appears to be solidly behind him. The nations that count here – India, Japan, the United States, the European Union, China, Russia and others – all have backed the Prime Minister. Call it the "September 11 syndrome," but the fallout from America’s global war against terrorism has helped to line up important international constituents behind Mr Deuba’s own war against terrorism.

Second, the governing Nepali Congress party has also backed up the Prime Minister, no small feat considering the hopeless state of factionalism within the party. Even the opposition parties, so vociferous in their earlier protests, have been muted in their criticism of the emergency measures.

Most significantly, the citizens too have nothing much to protest about, or so it seems on the surface. In the countryside outside Kathmandu, several villagers this reporter tried to talk to shied away from expressing their feelings about the emergency, fearful, no doubt, of seen and unseen forces.

This is the first time in living memory that a government has suspended civil liberties, and yet there’s been no march to the barricades. No slogan-chanting, no picketing. It seems the government is getting everything it wants on a platter.

But the public’s heavy silence can be deceptive. As long as the security forces respect the basic rules of combat – being extremely careful to avoid collateral damage – and so long as the state respects basic human rights (even though they remain suspended), then Mr Deuba has little to worry. The troubles will begin if and when those limits are crossed.

Experience elsewhere has shown that the longer a government continues with the emergency rule, the more there are chances of abuse. Mrs Gandhi’s emergency is a case in point. Starting out as a convenient way to side-step a judge’s ruling, her administration soon began clamping down on political dissent, the press and even anti-corruption messiahs like J P Narayan. It was the resolute durability of India’s constitutional organs that somehow managed to pull the country together after the damage done by the emergency.

Nepal may not have that luxury since the democracy here is still young and constitutional and state organs are still in the throes of a lingering birthing pain. That is why Mr Deuba, his ministers and senior officers ought to tread carefully lest they pull down the house to fix a window. But will they?

To be fair, they have tried so far, but they need to try harder. For in recent days, some worrying signs are emerging. Only yesterday, a couple of editors of Nepali-language weeklies were arrested for printing news the government did not like. This, at a time when the prime minister and information minister have both asserted that the emergency is aimed only against the Maoists and their sympathizers, no one else. Is it too much to ask that the government keep its own word?

84,000 aspiring teachers to know their fate soon

By Kiran Chapagain

KATHMANDU, Dec 18 - Clearing the confusing speculations over the delay in publishing the result of a selection examination for 84,000 aspiring teachers, the Minister for Education and Sports, Amod Prasad Upadhayay, said here on Monday that the result will be made public within two months.

The written examination had taken place six years ago, while the interview was conducted two years back.

The Minister’s announcement also comes in the wake of a Supreme Court decision early this month ordering the publication of the result as soon as possible.

"We have directed the National Teachers Service Commission (NTSC) as far as possible to publish the result of the teachers within two months," Minister Upadhayay told The Kathmandu Post at his office in Keshar Mahal. "To ensure the fairness of the result, we have invited the Commission for Investigation of Abuse of Authority (CIAA) to join the selection panel.’

Minister Upadhayay also said that although some development projects would be hampered, the education field would not be affected by the proposed budget cuts during the emergency.

On the issue of the withdrawal of monthly allowance for Tribhuvan University (TU) teachers, the Minister said that the Finance Ministry was ready to continue with the allowance if the TU administration could cut down its staff to a ‘manageable’ one. ‘The Ministry will give the allowance if the TU administration puts a ceiling on the number of its employees," he said.

The Minister also informed that Lava Prasad Tripathy has been appointed on Monday as NTSC member secretary, a post that lay vacant for the past few months.

"The Ministry has appointed Tripathi as the Member Secretary of the NTSC with directives of publishing the teachers’ result within two months," he said.

When contacted, the new Member Secretary Tripathi said that in the next three days he would be familiarising himself with what needs to be done to publish the result within the deadline given.

The government formed the NTSC in 1999 with the express purpose of publishing the results of the 84,000 aspiring teachers. But the new body abstained from doing so after being ordered by the CIAA not to publish the result until it finished investigation into the alleged irregularities in the written exam. Former Education Minister Govinda Raj Joshi was at the centre of the controversy as he was accused of rigging the exam.

The NTSC now has got the go-ahead for publishing the result after the Supreme Court decision early this month which said that the CIAA had no authority to ask the NTSC to suspend the result.

Meanwhile, the NTSC is yet to announce a new chairman after the former Chairman, Bishwa Nath Bhattarai, quit last Friday expressing disagreement over the seventh amendment in the 2001 Education Bill. The outgoing chairman’s contention was that the Bill if it gets royal assent, will scrap the NTSC altogether. Bhattarai had also blamed the Education Minister for being non-cooperative.

When asked about the resignation of Bhattarai, Minister Upadhayay said that Bhattarai quit his office only because he would not be eligible for the post if the new Education Act comes into force. The Bill says that only those government officials serving for five years in a special category are eligible to assume the post.

The Bill (seventh amendment), passed by the summer session of the Parliament despite protests from teachers and private boarding school associations, is at present before the King for his assent, and is expected to get the royal nod in a few days, said Minister Upadhayay.

Dismissing Bhattarai’s fears of the NTSC being disbanded, the Minister said that the Bill only proposes some changes in its organisational structure. When the new Bill becomes effective, there will be a three-member NTSC, instead of the present five-member body, said the Minister.

When asked about the appointment of the new NTSC Chairman, Upadhayay said the cabinet will take the decision after receiving the recommendation from a selection board comprising of a Public Service Commission member, Tribhuvan University Vice Chancellor and the Secretary at the Ministry of Education and Sports. The decision is also waiting for the royal assent to the Bill.

Government urged to maintain transparency

Post Report

KATHMANDU, Dec 18 – Political analysts of the country today aired their concern today regarding the infringement of constitutional rights in the name of state of emergency.

"Government should maintain transparency during the state of emergency," said Narahari Acharya, a political analyst at the interaction programme on ‘Emergency and Citizen’s rights’ organised by the ‘Himal Khabarpatrika’ today at the capital . "If the government is to preserve democracy in the country, there should be transparency regarding the process it adopts in quelling the Maoists," said Acharya.

Acharya added, "Media can play a significant role in bringing out the truth to the public in such period. Since emergency is not similar to martial law, media should not refrain from bringing out the truth to the public,"

Hari Rokka, a political analyst raised the question on what if emergency fails in solving the problem. " Emergency and the army mobilisation were the last resort in bringing the country to normalcy, if this move fails then there would be chaos," said Rokka.

"Leaders of the political parties must visit the affected districts to learn about the situation of their activists." added, Rokka.

Similarly putting forward the view, Professor Krishna Khanal said that emergency is a measure that country rarely adopts. "In the state of emergency, government have to make public the truth," said Khanal.

"It is necessary to go through how the Maoists movement gained momentum and who is responsible. Before the imposition of emergency government should have discussed thoroughly with all the political parties and intellectual persons. Emergency can be counter productive, if it starts to infringe upon the democratic and constitutional rights," said Khanal.

C.K Lal, eminent analyst said that since the emergency has been already been imposed, it should achieve its goals . " The objectives of the emergency is to restore peace in the country and it must be achieved," said Lal.