NCB to be established by April first week

By Maina Dhital

KATHMANDU, Feb 1 Necessary preparations are being made to operate the proposed National Cooperative Bank (NCB) through by-laws within the first week of April.

According to Janardan Acharya, Director General of Cooperatives Association and the Secretary of the proposed bank, endeavours are being made to operate the bank by the anniversary of the Association that falls on first week of April.

The bank that is aimed at promoting the co-operative societies under the single umbrella has a paid up capital of Rs 160 million. Till date 400 co-operatives have shown their commitments to make an investment of around Rs 80 million in the upcoming bank. Of the interested investors, 60 per cent are the cooperatives from outside the valley.

The bank has an authorised capital of Rs 640 million, which has been divided into 640,000 ordinary shares with a face value of Rs 1000 each. Interested investors have to purchase at least 10 units of shares. Those who buy at least 10 shares by February 19 have to deposit the whole amount while those who buy more than ten units of shares within the period can submit 70 per cent of the amount.

The establishment of the bank was delayed by over one and a half years due to lack of clear policy to run such bank. Previously, it was supposed to be run under the Cooperatives Act, but as the Act was not enacted over the time.

Following the confusion regarding the operation of the proposed bank, advice was taken from specialists from the Netherlands, which is known to have a model of co-operative bank, says Acharya.

The preliminary meeting of investors to be held on March 9 is expected to pass the by-laws to run the bank and constitute an ad hoc committee. The bank is being established under the Cooperatives Act 2048 (1991), with a view to mobilise the resources of the cooperatives.

According to Acharya the bill on the by-laws is expected to be tabled in the parliament in the upcoming session.

A similar bank established in 1963 was merged with the Agricultural Development Bank after four years, due to its ineffective operation. Over six thousand cooperatives are in operation throughout the country currently.

National consensus urged for poverty reduction

Post Report

KATHMANDU, Feb 1 Experts and planners have stressed that government and the major political parties should develop national consensus in fighting against poverty.

In an interaction program organized by the CPN-UML on the eve of upcoming Nepal Development Forum (NDF) meeting, they also said that government should take lessons from the past mistakes and should incorporate necessary corrective measures in the upcoming Tenth Plan.

Speaking on the program, former Finance Minister Bharat Mohan Adhikari said, though foreign aid is necessary to stimulate development activities of the country, the government and the concerned authority should make more efforts in maximizing the utilization of such aid.

"In the last 50 years, we have received around Rs 300 billion in the foreign aid, of which over Rs 150 billion was received alone in the last 12 years, but the overall outcomes, particularly in the social sector, has been less than satisfactory," he said.

He also said that most of the policies and programmes launched in the Ninth Plan have failed to achieve its basic target due to which the real situation of poverty and unemployment of the country has worsened further.

"Despite all efforts, the level of unemployment and underemployment have surged to 15 per cent and 47 per cent, which itself reflects that the overall development policy has failed," he stressed.

He also expressed concern over the widening gap between the rich and the poor and added that government should concentrate on speeding land reforms, extending agricultural road and irrigation to narrow the gap.

Speaking on the same occasion, Dr Shankar Sharma, Member of the National Planning Commission (NPC) stressed that some of the sectors have recorded impressive growth in the nineties. "Nepal recorded the fasted growth in Human development Index and external sector growth in whole South Asia region," he said. He also said that the development in the sector of infrastructure have also been remarkable in the region.

However, he admitted that the weak governance has been the prime problem of the government to stimulated development activities. "Due to this fact, the public service delivery has deteriorated in the last decade,’ he said.

Dr Pakash Sharan Mahat, Economic advisor of the Prime Minister said that massive development of infrastructures, particularly in the hilly region is the only way to fight against soaring poverty. He also stressed on the need to expand technical education to boost the development of the country. "The economy demands technical manpower whereas the existing education system only produces non-technical manpower, which is creating a mismatch between the nature of demand and supply of the manpower," he said.

Ram Babu Pant, Deputy Governor of the Nepal Rastra Bank expressed his hope that the financial condition of two big commercial banks would improve after the hand-over of the management to the private sector.

Prof Bishowmbhar Pyakuryal said that government should have presented a white paper on the current economic situation of the country before the NDF meet. Referring to the plunging demand, he said that the government should not even hesitate to inject more money in the market to boost the demand.

He also said that a recent study has revealed that the poverty has no direct relation with landholdings. "Some of the medium and large landholders of the hills are under poverty," he said.

Binod Bahadur Shrestha, First Vice President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said that government has not involved private sector in the numbers of the decision that was taken by the government recently.

Rajendra Khetan, Second Vice President of the FNCCI said that a strong public-private partnership has not yet been developed. He also urged all the political parties to work seriously to develop a minimum economic agenda.