Deplorable act

The news report that Taliban Islamic militia has started demolishing the two ancient magnificent Buddhist idols, along with other pre-Islamic statues is indeed shocking and deplorable. It is shocking because Talibans have shown their utter disregard to others’ religions and cultures. It is deplorable because the militia has hurt the faiths other than Islamic. Despite howls of international protests, Taliban rulers are on a demolition campaign to wipe out traces of civilization prior to the emergence of Islam. To be precise, Islam, a defect of Christianity, came into existence in the sixth century Anno Domino. If such religious fanatics are not stopped from pulling down historical treasures, they may extend their unholy acts, and may cast a pall of terror over the whole region.

Located in the Central Bamiyan province of Afghanistan, the two gigantic statues of Lord Gautam Buddha which symbolize an "apostle of peace", are the targets of the Talibans who have already disfigured the priceless statues. Prior to the Islamic invasion around 14,00 years ago, Afghanistan was a Buddhist centre, rich in cultural heritage. It is indeed distressing that the Talibans are playing with religious sentiments in such a gruesome manner. To the Islamic fundamentalists, the precious and sacred statues may be just "ordinary stones", but the destruction is, in fact, a crime against artistic and cultural heritage of mankind. In the past, there had been several instances where Islamic fundamentalists plundered and pillaged religious idols in Asia. But this time, their gameplan for vandalism appears to be on a massive scale. Brushing aside international condemnation of his order to destroy ancient Buddhist statues, Taliban supremo, Mulla Mohammad Omar, went ahead with his "edict" the other day. His outrageous move has shocked conservationists and Buddhists alike. What would happen if they begin destroying sacred idols, monuments, vihars and other relics, say, in Pakistan, India and Sri Lanka, even in that case in Nepal? How would Pakistan react if the marauding Taliban troops carry out a similar edict there? Pakistan has groomed these fundamentalists and, therefore, it should be responsible for such a reprehensible act.

Once a melting pot of eastern and western cultures, Afghanistan is now struggling for survival, reeling under a series of international sanctions, under the Taliban rulers. Recognized by Pakistan, Saudi Arabia and the United Arab Emirates, Talibans have heightened their radical activities in recent years. Unless these Islamic countries condemn and prohibit the de facto rulers, the ongoing war against world heritage could flare up uncontrollably. Moreover, the existence of such radical forces is a threat to regional peace and humanity, and calls for concerted international efforts to end the saga of destruction.

Reform measures for Nepali banking system

By Dr Govinda Bahadur Thapa

Alot of studies have been carried out to diagnose the ailment of the Nepali banking system, particularly the state-owned banks. Several millions of rupees have been spent so far on such studies. The IMF, WB and ADB also have been giving serious thoughts to improve this situation. The periodic plans and the subsequent budgets have made innumerable commitments for its improvements. Besides this, successive governments on various occasions have made several commitments and announcements to do away with the problem and distortion. The IMF had prepared a comprehensive programme of banking reforms under enhanced structural adjustment facility (ESAF) implemented in 1992. Yet, no improvement worth the name could be seen. That programme emphasized only on the liberalization of the banking system under which the interest rates were deregulated, statutory liquidity ratio (SLR) was abolished, Nepalese currency was made fully convertible on current account of the balance of payment (BOP), some prudential regulatory norms were introduced and so on. Similarly, a new Development Bank Act has been introduced to amend the existing acts governing the banking activities. All these changes have expanded the banking system. However, no reform steps have been undertaken to improve the internal functioning of the banks, particularly of the Nepal Bank Limited (NBL) and the Rashtriya Banijya Bank (RBB). Such half-hearted efforts continued for about a decade but without any result. All this resulted in the fast deteriorating conditions of these banks.

In 1990, a comprehensive reform programme was implemented under the commercial bank problem analysis and strategy study (CBPASS) to improve the financial position of these two banks. The government had paid 3.27 billion rupees from its budget to improve their financial standing. In fact, that was the payment made by the government for the government guaranteed loans provided by these banks in the past to the public enterprises. Under CBPASS, some important prudential norms including the system of loan classification and loan loss provisioning, were also introduced for the first time in the country. By doing this, these banks have slightly improved their capacity to make payments to the depositors to save the depositors’ money. As a result of the provision, big banks holding enormous amount of bad loans, have however incurred huge losses due to the system of loan loss provisioning to set aside from operating profits. This is the only reform worth the name that has really contributed to the improvement of the financial health of the banking system during last several decades. No other serious efforts to reform banks have been made. They have not even been able to prevent the worsening trend of the system. In some cases these measures seem even to have helped the situation to worsen.

Whatever reform measures implemented so far have not gone into the real issues of the problems: the appointment process of the top management including the board. This applies mainly to the RBB. Since this bank is fully state-owned, the government nominates all the members including the chairman and executive chief of the board. As per the relevant Act, the board comprises of a chairman and up to 8 members, including one member each from the Nepal Rashtriya Bank (NRB) and the Ministry of Finance (MOF). Earlier, the chairman and the general manager used to be two different persons. Usually, the chairman used to be the secretary of some ministry and the general manager used to be some senior professional. Since 1990, successive governments have started appointing the same person as the executive chairman. But it has virtually ceased to appoint a separate general manager as the chief executive of RBB.

The board members nominated by the MOF and NRB have their own important responsibilities. Therefore, they just attend the board meetings and approve the proposals tabled by the executive chairman. And, such chairmen are being appointed either on the basis of political affiliations or on personal relations. In most cases, the board members are nominated on this basis. This has been the trend for a long time. When the people responsible for running such a large and historically sick bank are appointed in such a manner, it is foolish to expect any improvement. Such people are neither career bankers nor they want to be one. They come to the bank with some ulterior motives of pleasing themselves, their political mentors and the well-wishers. The unscrupulous businessmen also find such people more handy and cooperative. Such people have neither any constructive plans nor any prior thoughts to improve the bank. They naturally have more leaning towards sanctioning the loans of huge amounts rather than the recovery. Majority of such loans happen to be the bad loans. And, even if there are project proposals, they are utterly fictitious prepared only for loans.

Another interesting part of the story is that none of the managements so far did any worthwhile effort to recover the disbursed loans. The recovery department has remained virtually defunct and none of the institutions responsible for keeping the banking system in track paid any serious attention towards forcing these banks to improve the recovery situation. Bank management did not even dare to remind the borrowers particularly the big borrowers to repay the loans. Another equally interesting part is that such bank officials and the borrowers go scot-free even though all such loans turn into bad. The bank is likely to lose whole of such loaned money. In fact, such loans were not disbursed to be recovered. Recently, an exhaustive list of such loans was made public. To everybody’s surprise, the list became only the reading materials for the public. In fact, this bank has been made a looting spot for the ruling elite. No reform programmes initiated so far seem to have given any attention to correct this situation. Neither have they proposed any measures to reform the appointment process of the top management, nor any worthwhile programme for the loan recovery. Everybody is convinced that so long as this situation continues, no other peripheral reform measures can really make any improvement. This is to be noted that the government should compensate every rupee lost in this bank from the taxpayers’ money.

Enormous amount of non-performing assets is the main and the most serious problem of the RBB. In many cases, the accumulated interest far exceeds the principal amount. Most of these loans have turned into the bad loans simply because the bank did not take proper decision in time. In every commercial bank, there is a common practice of writing-off of the irrecoverable loans. However, there is not a single example of such writing-off of the problem loans in this bank. This is because that the board does not dare to do so for the fear of the corruption charges. Being fully state-owned, this bank does not have general meeting of the shareholders as that in the privately-owned banks. In case of this bank, the government itself is the general body and, therefore, only the government can write-off such chronic loans. The government has to do this on the recommendations of the board and the board has never shown courage for such proposals. As a result, the problem loans have piled up from the beginning and the loan loss provisioning is being made regularly for such loans. This is one of the main reasons why the RBB has been incurring huge losses every year. Therefore, the reform process of this bank has to be started from the reforms of the board itself. However, it wonders why this aspect is not considered seriously yet. By amending the Act accordingly and off-loading certain portion of this bank’s share to the private sector, the board could be made more effective and responsible. The amendment could also incorporate the strong provisions as regard to the loan recovery.

The case of NBL is somewhat different since private sector holds the majority share, that is, 59 per cent and the government holds the rest. However, the composition of the board is so disportionate that the government with 41 percent share is represented in the board only by two members, where as the private sector with 59 per cent share is represented by seven members in the nine members. According to this provision, a private investor with only 7 or 8 per cent share is represented by two members in the board. In such a way, Golchha, Khetan and NB Group with only 20 or so per cent share in total make majority in the board where as the government with as much as 41 percent share sends only two members. And the bank employees who hold 7 per cent share do not represent in the board. The over-enthusiastic liberalizers in the name of privatizing the oldest and the largest state-owned bank made such a foolish provision. As a result, the board members representing the private sector, who are also the big borrowers, got hold of the board. The existing Commercial Bank Act has fully authorized the board to operate the bank and the management functions only on behalf of the board. Therefore, the board in which the private representation is in majority runs the show at its sweet will. This board did not show any interest in loan recovery and general body of the bank also could not use its muscle for improving the situation. If the reform programme serves their interests, they cooperate with the government for reforms, otherwise not. Therefore, here the Act itself has come in the way of reforms. And this deadlock situation could be solved just by suitably amending the Commercial Bank Act incorporating the provisions of the proportional representation system in the board and also of the loan recovery.

The reform proposals could be formulated indigenously by involving the concerned institutions and their responsible people. Instead of doing so, a package of reform programme has been prepared with the World Bank assistance involving billions of loan money. And some of the components of this programme do not look so important and necessary. Only time will say whether this package can reach the destination or not, and, even if it reaches the destination, one cannot be sure whether it will bear fruit as desired or not. Here, one thing is clear it has created a lot of confusion and also the crises of confidence among the concerned people.

Filtered water fiasco

By Rishi Ram Paudyal

If you enter a private school and feel thirsty, what would you do ? Would you drink water inside the school or try to find some other place where you could get safe drinking water?

You might be saying that this scribe has gone mad and so he has begun to ask silly questions which will have obvious answers. You might say, "Who would go out in search of filtered drinking water when you are inside a so-called private boarding school? A school that doesn’t hesitate to charge high and extra fees under various heads should have made drinking water provisions at least for students. You may wonder over the source of drinking water available to the students.

Please wait, before you give your answer. One day, this scribe entered a so-called private boarding school for work. It was hot and I felt thirsty. As I was thinking of how to quench my thirst, all of a sudden my eyes feel upon two notices - ‘Filtered water only for drinking’ & ‘Not for drinking’. The two notices were written in the heart of two tanks. Both pieces of information were written in capital letters to emphasize the purpose. The first notice was on the right hand side and the second was on the left.

Feeling happy, I proceeded towards the tanks which were placed adjacent to each other. After I reached the place, I turned on the tap of the tank which proudly boasted of containing filtered water and quenched my thirst. Satisfied, I thanked the tank but in no time my stomach began to whiz and suffer.

After some time, I left the school and came home but my stomach seemed to have carried the whole germy water with the tank itself ! It began to function abnormally and it didn’t come to its normal position until I spent some money on medicine and consumed it.

I didn’t know that the school which proudly boasted of imparting quality education based on morality, truth, and knowledge could lie so blatantly to students, parents and teachers. And unfortunately, I became a victim of the deceptive notices.

Later, I learned that the school peon directly filled the tanks with pipe water, adding some medical substances, may be chlorine, according to his whims and fancies.

The students and teachers, who had fallen ill after drinking the water and who know how the school made ‘filtered water only for drinking’, carry the precious drinking water from their homes. Others who have strong immunity power and who are oblivious to the quality of water are still drinking from the same tank.

So beware of the private (boarding) school’s pomp and colour, impressive mottos, seemingly good notices and high promises. Words are immune to germs, but your stomach may not be strong. So, don't fall prey to a strongly-worded warning notice. And mind you, the private schools’ activities may be as filthy and contaminated as their ‘filtered water.’

Should PM Koirala resign ?

The Kathmandu Post and Mercantile Communications conducted a survey on the topic: "Should Prime Minister Girija Prasad Koirala resign over his alleged role in the Lauda Air scandal, as demanded by the opposition?". The survey was done on the Net last week. Of the 1506 respondents, 80.9 per cent said "Yes", 16.8 per cent said "No" and 2.3 per cent said "Don’t know".

We regret the inconvenience, if any, on account of original names being kept back by some respondents.

The most sensible thing to do is to let all the details come out to the public, and revive faith in Nepal’s political democracy. It would be interesting to see if the CIAA would call on the Prime Minister for interrogation. If CIAA finds that the PM is involved, then, he should certainly be brought to court. It would send a positive note on accountability in Nepali political arena. Whether the Prime Minister should resign or not, I do not know the details of law on this. The bottom line is the truth should come out, and the culprit should be punished, even if it is the Prime Minister.

- Concerned Nepali

The Minister of Civil Aviation Tarini Datta Chataut and the Corporation chief have resigned. The CIAA has been investigating into the case. Why should the Prime Minister resign unreasonably? If the Prime Minister really has attempted to clean the corrupt leaders, why not wait for the result of the CIAA? There are so many ways to find out the facts of the case. Opposition parties can bring forward these cases democratically.

- Hook Changbang

There is no question that he should not resign as we all know that he is the most corrupt leader. Even the opposition parties cannot escape from the charges of such alleged anti-nationalist activities. If he has a little morality, then he should resign today and now itself.

- Ajay

None of the people who holds position in political arena is capable of running the country. They lack a vision or a sense of direction. We are celebrating our 50 years of democratic establishment but the situation is still the same.

- Aloa

Girija Prasad Koirala is our Prime Minister. But he has lost respect of people due to his inefficient and visionless leadership. He has not taken any significant decision to resolve the Maoist problem. He should establish priority to pay attention. What are his priorities? Is he serious to this problem and what does he think about it? The basic issues are never made clear and public. A competent and benevolent Prime Minister should be sensitive to issues that affect the majority of people. But his actions did not indicate that he is serious enough to handle basic issues facing the country. There are following reasons why Girija Prasad Koirala should resign from the post of Prime Minister. He remained as a Prime Minister for the longest period after the restoration of multi party system. I do not call it the restoration of democracy but only the restoration of multi-party system. People do not feel that the values, ethics and norms of democratic system are being observed. Prime Minister’s behaviour is totally undemocratic in every sense of the word, although he pretends to be the guardian of democracy. Secondly, he does not command the respect of people as a Prime Minister but is now being considered a bad leader because he is unfair to fellow citizens and party colleagues. Thirdly, he is not able to control corruption in the country although it is his main agenda. He is not serious to this problem and does not understand the situation. Now, he is too old to govern the country in an effective and efficient manner. There are many more points that suggest the indispensability of his resignation.

- Dil Kumari Gurung

The Cabinet, chaired by Prime Minister Koirala, has gone beyond its legal authority by involving itself in the Lauda Air scam. His direct intervention beyond his authority clearly demonstrates the government’s immorality He has no authority to stay in power even for a day. He cannot humiliate Nepali people any more.

- Nepali

The Prime Minister must resign. He is leading the country wrongly, according to his whims and fancies. When a leader of that position shows bad conduct and intolerance, (remember the Lauda Air, Dhamija, Chase Air scam, etc), people should rise and remove him immediately even if he has a majority in the parliament. There must be a mechanism and laws to stop him from doing unethical acts.

- Nationalist

I don’t think Girija Prasad Koirala will resign It is clear that he has no sense of morality. How can he cheat Nepali people after promising to provide clean and efficient governance? By allowing to happen one scandal after another under his nose?

- Sunita

It is not that the opposition parties want Koirala to resign but that the entire Nepalis want him to step down. He is a corrupt leader, most citizens know that now. He is the root cause of tarnishing Nepal's pride, and pushing the country to a shambles. He should be put on trial to cite an example for those who come to power later.

- Tartika

Yes, certainly he should resign immediately, and parties should put their pressure on the new government so that it could forge talks with the Maoists in order to restore law and order. Don’t cheat the public. Or else, they will break their silence in an appropriate manner.

- Suman Sharma

Girija Prasad Koirala must resign and pave a way for a free and fair investigation into the Lauda Air scandal. If found guilty, he should face penalty, and if not, he will be cleared and can be re-elected, if his party chooses him for any post again. However, he can’t ruin the country’s present and future for his self-interest.

- Nagina Rana