PM inaugurates Kumari Bank

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KATHMANDU, Sept 14 - Prime Minister Sher Bahadur Deuba inaugurated Kumari Bank Limited amid a function today.

Kumari Bank is the 15th commercial bank. Though the Bank was formally opened Friday, it had begun its banking transactions a couple of months earlier.

Following the adopting of liberal economic policy by the government, the banking and financial sector has made a good progress over the years.

"Besides investing in small schemes, the time to invest in big projects like hydroelectricity, tourism and agriculture has come," said PM Deuba urging the commercial banks to expand their investment areas.

Over a dozen development banks and 49 finance companies have been established during the past one and a half decades.

PM Deuba also instructed the banking sector to reach to the common people.

Though there has been considerable increasement in the number of commercial banks, the institutional loan flow in the remote areas have remained weak.

Governor Dr Tilak Rawal said the central bank has adopted flexible monetary policy in order to avert the possible implications of the global recession in the country. To ward off economic recession in the country, Nepal Rastra Bank has reduced the refinancing rates.

He also ruled out the possibility of devaluating Nepalese currency against Indian currency. The real exchange rate shows that Nepalese currency is not overvalued. The current pegging is prefect.

He said that peace and security is a must for the consolidation of an economy.

Now economy is more affected by non-economic factors. Because of it, a few weeks ago some depositors withdrew their money from banks, but the situation is controlled now.

The governor also claimed that all the commercial banks are in good liquidity position. Now commercial banks have a total of Rs 176 billion deposit and their total investment stands at Rs 110 billion.

Though the two state-owned commercial banks’ financial condition is not good, they are not on the verge of closure. They can be improved, he stressed.

Noor Pratap Rana, Chairman of Kumari Bank, said that the bank is introducing modern technology and skilled manpower and also opening branches in different parts of the country.

He claimed that the target of the bank is not only to earn profit, but also to contribute to the interests of depositors, national economy and the target group defined by the government and Nepal Rastra Bank.

Chief Executive of the bank Surendra Bhandari said that the bank has collected a deposit of Rs 600 million and made a total investment of Rs 580 million over the past five months of the bank’s soft launch. He also said that the bank was going to introduce Telebanking, ATM and Internet banking facilities in the near future.

It’s time for self introspection: FM

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KATHMANDU, Sept 14 – Hundreds of civil servants have not been paid their salaries for the last five to six months following huge losses incurred by public enterprises.

The government sources say that the low rate of return, mainly due to lack of financial discipline and techniques, are responsible for such overdue in salaries to the employees. "We are all equally accountable for this," said Dr Ram Sharan Mahat, Finance Minister at a program organised by the Financial Institution Employee Union of Nepal (FIEUN).

The employees accused the government for neither providing salary and other extra allowances nor security to the employees working at the Maoists affected districts for months. The employees also flayed the government accusing of battering the Trade Union.

Referring the worsening economic activities of the country, he stressed the need of secured investment environment to boost the national economy. "No country can survive when the economic and financial situation are in bad shape," Dr Mahat further added.

The employees criticised the enforcement of Essential Services Act on the ground that it has limited the activities of Trade Union. They accuse the government for not implementing the understanding reached a couple of months ago regarding the hike of the salary.

Speaking at the occasion, Dr Tilak Rawal, Governor of Nepal Rastra Bank however, informed that there is an increase in the revenue collection in recent months.

But, if the peace and security scenario deteriorate, the impact on national economy will be severe, he warned. He also said that the non-economic factors are affecting the economy rather than the economic factors.

Rupee tumbles by 50p

KATHMANDU, Sept 14 (PR)– The Nepalese rupee today depreciated by 50 paisa against the American dollar. Such depreciation is the second time within a week as the Nepalese rupee had slipped by 20 paisa on last Monday.

The official selling rate of Nepalese rupee against an American dollar today skidded to touch Rs 76.10 whereas such rate was Rs 75.60 yesterday.

The major cause of such depreciation is the weakening Indian currency. Since Nepal maintains fixed exchange rate with the Indian currency, any depreciation of the Indian currency directly affects the domestic exchange rate with the greenback.

The other cause of the slip of Indian currency is due to revised reference rate by the Reserve Bank of India. The Bank increased such rate by 11 Indian paisa on Thursday. Similarly, failure to inject adequate amount of dollar to meet the increased demand prompted by the soaring imports is another factor for the depreciation of Indian rupees.

The Nepalese rupee had depreciated by over 5 per cent during last fiscal year. The depreciation would help to enhance competitiveness of Nepalese export in the international market. However, it would be painful for the importers and the government, as it increases the dollar payment liabilities.

‘Banking system may collapse, if not paid due attention’

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KATHMANDU, Sept 14 – Concerned financial experts have warned that the entire banking system would engulfed in the dire problems if the politicians will not pay due attention to address the current worsening economic problem of the country.

Speaking at a press conference organised here today, Narendra Bhattarai, Managing Director of Nepal Bangladesh Bank and President of Bankers’ Association complained that political events have completely overshadowed the economic problems. "If such situation continues, the overall economy of the country may collapse," he warned.

He also said that plunging inflow of tourists is the main cause of current concern, as most of the industry is not even in the position to pay the interest of the loans. "The deteriorating condition of the tourism industry has jeopardised the overall banking investment worth Rs 15 to 20 billion rupees in the sector," he said.

He further said that the major exportable industries such as, garment and carpet, which absorb major chunk of the banking investment, are also in the similar position and they have started requesting the banks to extend the deadline of the loan repayment. " Since the major chunk of the real sector is in the sick position, the future of the financial institutions also seems gloomy," he said.

Bhattarai also said, day to day transaction of the Nepalese banks have not been affected by the Tuesday’s horrible terrorist attacks on the key American installations.

On the occasion, he also briefed the financial condition of the Nepal Bangladesh Bank and said that the overall operating profits of the bank, during the fiscal year 2000/01 has soared to Rs 450 million and the bank had issued 1:1 bonus share in the previous fiscal year.

He also said that the bank has emerged as the leading private bank in expanding its services to the various part of the nation through its 15 branches. The bank has also established itself as the only private bank authorised to conduct transactions related with the government’s revenue. He also reiterated that the financial position of the bank is strong and has the capability to weather the emerging problems.

Experts criticise developed economies'role

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KATHMANDU, Sept 14 - Experts here have opposed the upcoming fourth ministerial round of the World Trade Organisation (WTO) citing insincerity of the developed economies on meeting the commitments made during the Uruguay round.

Developed countries then had made a number of pledges that range from guaranteeing special and differential treatment and greater market access to the underdeveloped countries. However, failure on their part to materialise their promises prompted most developing and least developed countries to argue on the need for a new round of negotiations, that is scheduled to be held in Doha, Qatar from 7th to 14th November this year.

Despite the opposition, participants that gathered at an interaction programme to clarify the position of Nepal in the upcoming meet, said that the meet should be held only after the developed countries take upon the implementation issues first.

They argued that developed economies talk about greater market access and higher participation in the global trade but are all the time coining methods to protect their regime. The concern of the participants was particularly on various agreements including the agreements on Trade Related Intellectual Property Rights (TRIPS) and on Agriculture (AoA).

Though Nepal, which is yet to obtain the WTO membership, will have no say in the decision making process at the meet, the programme was organised to give a picture of the stand that Nepal should take if invited to speak in the capacity of an observer. Nepal has been given the observer’s status.

Speaking on the occasion, Prachanda Man Shrestha, Joint Secretary at Ministry of Industry, Commerce and Supplies, also the Chief of the WTO Cell in the ministry, said that Nepal’s accession process is likely to take more than a year. "Nepal is presently waiting and watching the developments at the WTO," he said.

The government initially had pledged to complete the accession process before the end of 2001. It has even carried two round of negotiations with trading members. While the first was at the Working Party meet of the WTO in March 2000, the second was held at the bilateral negotiations in September 2000.

Shrestha said that the government would first see the outcome of the Doha meet. "Nepal’s accession to WTO at this point would not be relevant since the Doha meet may grant some extra concessions to new members," he said.

Furthermore, as the controversial TRIPS agreement is currently under review, it would be advantageous for Nepal to wait and see for new developments before committing to fulfil the present provisions contained in the agreement, he said.

Similarly, Posh Raj Pandey, Country Manager of Nepal’s Accession to WTO, apprised of the latest developments at the WTO and said, "Nepal should move forward capturing the practical interests rather than concentrating on ideology and values." He stressed that the new round should be in the interest of the underdeveloped economies, including Nepal.

He also stressed that the meet should address the issues of transparency at the WTO and should reach a conclusive agreement to materialise the promises of technical assistance to underdeveloped countries. He also opposed the patenting regime contained in the TRIPS agreement.

Similarly, Ratnakar Adhikari, General Secretary of South Asia Watch on Trade, Economics and Environment (SAWTEE) said that non-governmental organisations (NGOs) should play a crucial role in trade policy making. His statement was directed against the recent SAARC joint declaration that shunned the contribution of NGOs.

"The new round is being held to review, reform and repair the mistakes of the past. However, before that, the commitments made by the stronger members must be fulfilled first," he said.

Participants said that the new round must look into methods by which the capacity and trade of underdeveloped economies can be enhanced. However, their major concern was the lack of experts in such country who could understand the complicated agreements contained in global rules based trading regime.

Yamuna Ghaley from Action Aid and Hemanta Dawadi from the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), including various Members of Parliament, among others, also spoke on the occasion.

Recycling of used mercury stressed

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KATHMANDU, Sept 14- Mercury used in jewellery making and other metal works can be reutilized, which will not only save money but also environment. Participants of an interaction on ‘Cleaner Production Technology and Impact of Industry-used Mercury over Environment’ stressed on the reuse of mercury to reduce environmental pollution.

Gopal Krishna Shrestha, Cleaner Production consultant, said if precautions are not taken while using mercury in the metal works like jewellery and images making, the mercury will be wasted and the person in contact with mercury may suffer from various type of illnesses.

In Nepal, jewellers and metal workers use mercury in plating jewellery and images made of gold, copper and other metals. Mercury is wasted, during vapourisation and drained with water during the work, and pollute the environment.

It is estimated that in Patan alone a total of 950 kg of mercury-vapour is amassed in the atmosphere, while 50 kg of mercury pollute the water resources each year as mercury-plated metal products are washed. But, if only 80 percent of the wasted mercury is collected, a family can save up to 38 and 1.6 kg annually from being vapourized and washing it away.

Experts also say that the instruments to collect the vapourised and water washed mercury costs around Rs 60,000 and 6,000 respectively.

Mercury is a very sensitive liquid metal. If it is not handled properly, it may cause severe damage to human health and environment. Mental retardation, paralysis, skin and heart disease, among others may occur, if mercury enters into a human body

The interaction was organised by Handicraft Association of Nepal (HAN) with the support of Environment Sector Support Programme and Institute of Environment Management. Han Sen, Amar Manandhar, Shyam Tandukar, Sanjay Bahadur Shah and President of HAN also spoke on the occasion.