NRB warns of dissolving NBL board
Decision affects lending

Post Report

KATHMANDU, Feb 22: Nepal Rastra Bank (NRB), the central bank, Thursday summoned the Board of Directors of Nepal Bank Limited (NBL) to submit explanation why not to dissolve the Board of Director of the ailing bank.

The notice issued as per the Nepal Rastra Bank Act Section 86 sub-section 6 has given 15 days’ time to the NBL board of director to furnish their explanation on the issue.

Following the issuance of the notice, the loans that have to be approved by board have been stopped, according to a highly placed source in the bank. The bank has made a total of over Rs 23 billion up to now.

The central bank, in a latter sent to the NBL, has also said that if the board fails either to submit its explanation or the explanation submitted is not satisfactory to the central bank, it would dissolve the board.

The notice to dissolve the board of director has come at a time when preparations are underway to hand over the management contract of the bank to a private party.

According to an NBL source, the central bank has issued the notice to the semi-government owned commercial bank raising question over the efficiency of the board of director of the bank.

Rajendra Kumar Khetan, one of the enfluential board members, commenting on the issuance of the notice said, "The decision of the central bank has come very surprisingly and suddenly. However, being a regulatory body, I think, NRB must have done this in keeping with the future of NBL in mind".

NBL is going to submit the reason why the board of directors should not be dissolved, and the explanation will also include various efforts that the board has done to rescue the bank, he added.

Experts say that dissolution of the board of directors of NBL will have negative impact on the privatization process of the state-owned enterprises (SOEs) as NRB itself has private representative in its board.

Similarly, it will send wrong signal to the entire private-public partnership approach supported by the international donor agencies during the Nepal Development Forum (NDF) meeting and the National Development Council (NDC) say experts.

The board has one member each from the finance ministry and the central bank and the rest five positions are filled from the private sector. The incumbent board of director was constituted on April 23, 1999.

Lichen export ban causes a huge loss

By Shyam Raj Bhatta

BHAITADI, Feb 22 : The impractical policy imposed by the government on the export of lichens has greatly dampened its export potential to India, where it is massively used in producing perfume.

The Forest Regulation 2051, which put lichens into the category of herb, has a mandatory provision of processing them before export. However, despite a huge production of lichens in the local areas, lack of processing technology and necessary machines in Nepal, the huge export potential has been
greatly hampered.

Though the provision was enacted seven years ago, the export of the lichens suddenly became affected after the local administration imposed strict prohibition on the export of the wild lichens since last fiscal year.

According to the local people of the Far Western Development Region, who were actively engaged in collecting lichens since many years, after the strict enforcement of the provision, hundreds of tons of lichen is rotting in the hills, which has resulted in a loss of income of millions of rupees.

Most importantly, the complete on the export of the parasite has massively impacted incomes and employment of the grass-root local people since majority of the lower class people of the area was employed in the collection of lichens.

Prakash Lamshal, District Forest Officer, said that the more than one hundred tons of lichens is being rotten annually in the Baitadi district alone. The figure could be much higher for Dadeldhura district, which has the largest production of lichens in the region.

According to the local lichen traders, India is the only export market of the herb, which has high demanded in India for manufacturing expensive perfume. The freeze in the lichen export has also adversely affected the revenue of the local authorities.

During the fiscal year 1999/2000, the district Forest Office collected revenue worth over half a million only from the export of lichens. Local lichen collectors have been irked by the wrong policy of the government. "The total trade of lichens has come to a standstill due to the wrong policy of the government," said Ram Dutta Bhatta, one of the active traders of lichens.

After the ban on the export of lichens through, the cross-border traders have now started using illegal ways to export them to India. The remarkable price difference of the product between Nepal and India has also prompted such illegal trade. According to the locals, one kilogram of lichens, which cost around Rs 45 in Nepal, can easily be sold in India at around Rs 140.

Tourist arrivals in Nepalgunj nosedive

Post Report

NEPALGUNJ, Feb 22: In what may be said as the reflection of down falling scenario of tourism industry in Nepal, the number of tourist arrivals in Nepalgunj during the past three months has recorded a sharp decline in the wake of imposition of State of Emergency.

According to District Tourism Office (DTO), the number of incoming visitors in this city fell to mere two dozens from over three hundreds during the last three months. Nepalgunj is one of the major Nepali cities located in the mid-western region and is a gateway of major tourist destinations of the region

"More than 350 inbound tourists from India used to visit the City annually through Nepalgunj customs. However, the figure has dropped to 23 during period of the last three months," an official at the DTO said. This is a decline by over 75 percent in comparison to the figure of inland tourist arrivals during the same period last year.

The drastic decline in the number of inland tourist arrivals is due to the security reasons and also due to the fact the area is closer by the areas where Maoists terrorists are active, added the DTO officials.

Furthermore, the drastic fallout of the inbound tourists at the national level too has culminated in the downturn arrivals of visitors calling on the City.

While the tourists visiting Nepal through Nepalgunj customs numbered 30 and 20 during September and October last year, the same has slid to 10 per months after November 2001 till the month-end January, according to the arrival figure of the DTO.

Meanwhile, with the decline in the number of tourists visiting the City, the hotel industry, which has been on the rise in recent times, is facing tough times and are at the verge of closure, laments the travel trade entrepreneurs of the city.

Navakanta Sapkota, Proprietor of New Bheri hotel said that the he would be forced to shut down his hotel if the tourist arrival trend did not improve. "In the absence of income, the hotel is in no position to support burgeoning overhead costs," he stressed.

Similar is the notion of the proprietor of over 100 hotels that are into operation in the city. "We have no choice but to shut down the hotels," they said, adding that the performance of February and March 2002 will delineate the future of the hotel industry in the City. These hotels are providing employment for over 1000 persons.

Though the number of third country tourists visiting the City as the final destination is normally on a lower side, it is famous as a transit destination. It serves as an entry point for the Bardia National Park, and for the other nearby tourist destinations, says an official of DTO.

The latest statistics for the incoming tourists throughout the Kingdom during the last year showed all time largest plunge which is well over 21 per cent. The Nepali tourism industry has been suffering severely since the last two years. The national and the international incidents have cumulatively affected the nation’s major foreign currency spinner.