NRB announces reform programme

BY A STAFF REPORTER

Kathmandu Nov 23: The Nepal Rastra Bank (NRB) has eventually come up with the long awaited strategy, which aims to bring about the reformation of the 121 financial institutions currently operating in Nepal.

The strategy primarily focuses on enhancing the operations of the two largest commercial banks-Rastriya Banijya Bank (RBB) and Nepal Bank Limited (NBL) holding two third share of the financial market in the country. These two banks of late have been mired by managerial and other problems, and are in dire need of thorough reform.

International financial institutions like the World Bank, Asian Development Bank and the International Monetary Fund have assured the government to provide the assistance for taking ahead its programme of financial sector reforms.

The eighteen point strategy, which includes the amendment of Nepal Rastrya Bank Act 2012 B.S. aims at speeding up the process of financial sector reforms according to a press statement issued here recently.

The financial market in Nepal witnessed a significant expansion in the recent years following the liberal policies taken up by NRB, the apex financial institution in the country.

The programme for improving the financial sector in Nepal started in the eighties. The liberal licensing policy adopted thereafter encouraged more financial institutions to enter the financial markets. Presently there are 14 commercial banks, 47 finance companies, 35 co-operatives and 25 non-government organisations operating in different parts of the country.

The mushroom growth of financial institutions took place following the liberal policy of NRB, but the ensuing setback in the form of managerial weakness were witnessed in the financial institutions in the absence of their effective monitoring and inspection.

In this backdrop the NRB has come up with financial sector reform strategy.

The new strategy will enhance the security to depositors, encouraging them to invest in productive sectors, facilitating flow of financial information, promoting the transparency in transaction, adopting a modern and well-managed auditing system, developing money market and encouraging the flow of export credit.

In the light of the fact that Nepal Bank Limited has not been able to keep track of the financial transactions of Rastrya Banijya Bank, Nepal Industrial Development Corporation, the Central Bank will improve the accounting and auditing system of these institutions and will try to enhance the transparency by regularly disseminating the information of their financial status.

Considering the dismal performance of NBL and RBB with a substantial decrease in gross asset that was found from the recently conducted study on their financial conditions, the central bank would pay a special attention in the line of reconstructing and privatising the NBL and RBB.

Encouraging private sector investment in the opening of co-operative banks though said to be a new breakthrough by the new strategy was already made public through the budget announcement some four months back.

Likewise the central bank now has realised the need of export import banks, investment bank, and Credit Rating Agency and plans to launch them in the near future.

Nepal Rastrya Bank, according to the press statement, is going to implement the Code of Governance related with the financial institutions and amend other financial acts also. The central bank also plans to introduce other necessary act including the Merger and Acquisition Act.

The existing limitation of 50 per cent equity participation for joint ventures NRB is going to be further encouraged in order to attract foreign direct investment. Opening of new branches of foreign banks will be encouraged, the press release said.

In order to solve the present problem of capital ownership the central bank will make the necessary arrangements to check the possession of shares by a single person or a group of institutions.

The central Bank also aims at opening banking training centre and making structural changes in Credit Information Centre.

The Central Bank in its bid to rectify the shortcomings in the financial sector looks forward to establish the Asset Reconstruction Company to reduce the ratio of bad loans and upgrade central banking research and financial monitoring mechanism.

The strategy aims at improving the financial as well as institutional capacity of Rural Development Banks. It aims to provide micro-credit to reduce rural poverty through the launching of income generation programmes for the people.

Gorkhapatra informs PAC about probe

Kathmandu, Nov. 23 (RSS): At the meeting of the House of Representatives Public Accounts Committee (PAC) held today under the chairmanship of chairman of the committee Subhas Nemwang, the chairman of the board of directors and the general manager of the Gorkhapatra Corporation, who were called for informing the committee on matters relating to providing of facilities including gratuity and others from the fund without taking action againsts the staffs serving there with fake certificates, informed that the process of implementing the investigation report is in the process and will be completed within three months.

The meeting decided to direct the concerned corporation and the Ministry of Information and Communication to take action and inform the committee by implementing the investigation report within the three months as per the commitment expressed at the committee meeting, not to reward those who do not act as per the laws and to carry out work so that public fund and property is not misused.

Likewise, the secretary at the Ministry of Finance, who was invited to inform the committee on the stock declared by the companies, its expenditure and the remaining stock and VAT revenue concession and pay back processes for the purpose of VAT, informed that 30 per cent of the stock declared by the business firms and companies was spent and the rest is in stock.

The meeting also decided to issue directives to the Ministry to provide within seven days the Ministry’s clear concept on the problems and situation besides the stock declaration, expenditures and remaining stock.

Can RNAC soar high with clipped wings?

BY A STAFF REPORTER

In less than a week’s time, a new chapter should be added in the aviation history of Royal Nepal Airline Corporation (RNAC). On December 1, for the first time, the beleaguered National Flag Carrier could see the donning of its colours by a wide bodied Boeing 767 aircraft.

A deal was signed between RNAC and the internationally reputed Lauda Air of Austria on September 27, for the former to lease a wide bodied Boeing for its long haul flights for 18 months.

However a few glitches still remain before the Boeing 767 can make a safe landing within the RNAC fleet. First of all, the Corporation should get an all-clear signal from the Public Accounts Committee (PAC) of the Parliament and then only can the already signed deal see the light of the day.

A lot has been written about the present deal in the local media and considering the huge amount of money involved in leasing the aircraft, this was not surprising. Even now, the sagacity of the agreement to lease the Boeing 767 from Lauda Air, is still being questioned from different sectors.

However, without questioning the prudence and the rights of those who oppose the Lauda Air deal, a few queries regarding the necessity of a wide bodied aircraft for RNAC still remain unanswered.

Does RNAC need a wide bodied aircraft or not? Aviation experts have recommended from almost a decade back that for the airline to be more competitive, it needs such an aircraft for its scheduled long route flights. This is understandable, considering the comforts that are there in a wide bodied aircraft, compared to the narrow body Boeing 757 the Corporation has at present. Also, the competiters of RA, fly the more comfortable Airbus or Boeing 767s.

Now how do you get such an aircraft? As RNAC does not have enough capital to make an outright purchase, the best option is to lease such an aircraft. But again, how do you lease an expensive aircraft?

Officials at RNAC, including the present Executive Chairman of the Corporation, say that the airline must be given a free hand to lease an aircraft according to international aviation norms. However, after experiencing several setbacks in the past, authorities here have implemented stringent regulations in aircraft lease deals.

This is alright, but how can RNAC soar high, specially in this immensely competitive time, if it cannot get an aircraft that the airline badly needs? Yes, no financial irregularities must be allowed, but this does not mean a government approved deal should be brought to a grinding halt because of past misdeeds of others.

The tourism sector must be considered as the major hope for the country to see a turn-around of its sagging economic fortunes. And the image and credibility of the National Flag carrier goes a long way in making more robust that tourism sector.

At a time when other international airlines are steadily increasing their flights to Nepal, there is immense scope for RNAC to also spread its wings further and contribute in the further growth of Nepalese tourism. But it cannot do that with its hands tied.

In the present deal, it must be taken into account that Lauda Air is an internationally reputed airline. Furthermore, it has regular flights coming in to Kathmandu. The Executive Chairman of RNAC has time and again explained that the Lauda Air lease deal is one of the best the Airline has signed and he has also explained how the Corporation stands to benefit tremendously by getting the wide body aircraft.

What must be taken into account now is that RNAC is badly in need of a wide body aircraft and officials at the Corporation are fervently saying that they have made the best deal in getting a suitable plane. RNAC has already sold hundreds of seats with the confidence that it would get the new Boeing after the international agreement was signed.

Naturally everything cannot be accepted at face value. But aren’t there any mechanism to punish the guilty, if any misdeeds have indeed taken place? Can’t the officials involved in the present deal, if they have acted against the interest of the nation, be punished even after the aircraft has flown in? There is no reason why the authorites cannot ensure that RNAC gets its required plane and it does not lose international credibility, while at the same time making sure no financial irregularities have been committed. But this can’t happen by bringing to a complete halt a government supported international agreement and throwing in the winds the image of an international airline.

School teachers stage protest rally in capital

Kathmandu, Nov. 23 (RSS): Teachers and staffs of the public schools of Kathmandu district staged a protest rally at Ratna Park today under the initiative of the representative body of the teachers.

Today’s programme is the third-day protest programme against the frequent warnings issued to the headmasters by the All Nepal National Free Students Union (Revolutionary) for the refund of the educational fees collected by the public schools, for not teaching Sanskrit language and not singing the National Anthem.

The teachers have already staged gherao and sit- in programmes of the District Education Office Kathmandu, the Central and Regional Education Directorates on November 22.

Koirala appreciates Agrawal’s contributions

BY A STAFF REPORTER

Kathmandu, Nov. 23: Prime Minister Girija Prasad Koirala said today that the contributions of the late Madan Lal Agrawal to bring about positive transformation in the education, industrial and religious sectors in Nepal deserved due recognition.

"He was a personality having all the positive human traits desired of a person and a friend of the Koirala family who gave political guidance whenever needed," Koirala said.

Koirala also released the book entitled "Madan Lal Agrawal: A Multidimensional Personality" published by the Madan Lal Agrawal Memorial Foundation on the occasion of his 76th birth anniversary here today.

He said no length of words or writings would be able to bestow respect upon late Agrawal, who lived up to the ideals upheld by the Aadarsha Vidyalaya established by his father Krishna Prasad Koirala.

Chairman of the Madan Lal Agrawal Memorial Academy, Chiranjibi Lal Agrawal said late Agrawal during his lifetime had made selfless contributions for the development of the educational, religious and industrial sectors in Nepal.

He said the Academy was looking forward to expand its services in the days ahead.

Shankhar Lal Kediya highlighting the contributions of late Agrawal said he was a multidimensional personality who devoted himself for the upliftment of the education sector in Nepal through the establishment of different schools and colleges.

His contributions to promote Hinduism in the country deserves due appreciation. He was affiliated with the Sanatan Dharma Sewa Samiti, Pashupati Area Development Trust, Shankharacharya Spiritual Center. Late Agrawal was also involved in the enhancement of the health sector in Nepal through the establishment of many health centers, Kediya said.

Chairman of the Nepal Madwari Council, Hulas Chandra Golchha hailed the government’s decision to bring out a postal stamp in the name of late Agrawal.

He said the government had not so far published any postal stamp in the name of an industrialist. "The act of the government is a show of respect to the entire industrial and business community," he said.

Golchha said the book on the biography of late Agrawal had filled the void and would be important for those wanting to know about the industrial development in Nepal.

President of the Federation of Nepalese Chambers of Commerce and Industries, Pradeep Kumar Shrestha said late Agrawal’s contribution to take ahead the process of establishing the Federation is worthy of praise.

He said the contributions made by late Agrawal to the different social sectors in Nepal would be respected and remembered by generations to come.

The programme was chaired by Pandit Megh Raj Sharma.

Editor of the book, Suresh Sharma said that it had taken one and a half years for the completion of the book which had 448 pages and was divided into five sections.

Eur Orient submits letter seeking time

BY A STAFF REPORTER

Kathmandu, Nov 23: EurOrient today registered a letter at the Department of Electricity Development (DED) requesting the extension of the deadline to pay a 4.2 million rupees performance guarantee for the survey license of Arun III Hydropower Project.

The American Company’s local agent Binaya Amatya today submitted at the DED the letter asking an extension of between two and three months on the deadline — that was earlier fixed for today.

EurOrient has cited the unavailability of adequate American insurance companies here as the reason behind the delay in the payment of the guarantee money. The company has explained that it needs more time to work out its agreements with some European insurance companies to make the payment for the survey license of the much-talked project.

The DED had earlier fixed the deadline for EurOrient to make it pay the 4.2 million rupees as performance guarantee for Arun III’s survey license — for which the Los Angeles-based company had applied last August.

The DED, however, could not confirm if the American Company had submitted the letter. "The Company may have registered the request letter at our registration counter but it has not reached my desk as yet," said Dr. Kishore Babu Aryal, Director General at the DED.

He said that the officialdom would have to think about the request of EurOrient. "We will have to study the matter. It could be decided at my level or it may even have to reach the higher ups."

According to Dr. Aryal, what needs to be gauged is the seriousness of the company. "If they are serious enough, perhaps we can think positively on their request to extend the deadline."

And, it is this issue of seriousness that has come to the fore after EurOrient repeatedly began to ask for the extensions of the deadline to pay the performance guarantee in the last couple of months.

So much so, the American Company earlier had even told the DED that it would pay the performance guarantee only at the time of acquiring the construction license. Meaning, it wanted the survey license without paying the 4.2 million rupees. But, the DED turned down its request.

If it pays the performance guarantee, the American Company will receive the survey license for around one year. Then after, it will be required to sign a Power Purchase Agreement (PPA) with India and furnish its financial arrangements to acquire the construction license for the one billion US dollars hydropower project.

The run of the river project, Arun III is basically designed to export power to India. Which means, EurOrient has no way out but to sign the Power Purchase Agreement with the immediate southern neighbour if it wishes to win the project.

Some officials at the DED believe that EurOrient may be hesitating to pay the performance guarantee since it is not sure if it would be able to sign the PPA with India in the near future. "If it does not get the PPA signed, it will lose the 4.2 million rupees it will have paid for the survey license," said a senior official with the Department.

But, some hydropower experts take EurOrient’s time buying move as a disturbing signal. "For a company that has dared to construct the one billion US dollars hydropower project, the 4.2 million rupees for performance guarantee should be pea nuts," said a hydropower expert.

Clearly, such doubts come in the wake of the kind of death the earlier version of Arun III had to face. Once popularly known as Baby Arun, the project was initially designed with the installed capacity of 201 MW. After creating much controversy, this junior version of Arun III died in 1995 as the World Bank decided to pull out from the project-funding spectrum.

Now that the project has been reinvigorated, its installed capacity has been doubled to 402 MW. Yet, its cost estimate has gone down to US Dollars 2,500 for its every Kilo Watt — half the price its earlier version had.

Students’ role in cultural awareness stressed

BY A STAFF REPORTER

Kathmandu, Nov. 23: Navin Prakash Jung Shah, Vice-Chancellor of Tribhuvan University, today said teachers and students could be an important vehicle for generating cultural awareness in the society.

Shah expressed the view at a SAARC writers’ seminar on "Challenges of Literary Dialogue and Interaction in the SAARC Countries" organised by Tribhuvan University at the Tribhuvan Memorial Hall, Kirtipur.

Shah, who was also the chief guest at the seminar, emphasised the importance of the translated versions of different genres written in diverse languages in familiarising the people with each others’ culture, tradition and literature.

Sharing his views, Prof. Abhi Subedi, Chairman of the Central Department of English, was of the opinion that the interaction has opened more avenues for cultural interpretation and developing creativity among the writers of the region.

Prof. Subedi also said that literature could be an effective weapon for the world peace.

Similarly, Dr. Amrik Singh, eminent educationist and former Vice Chancellor of Delhi University, said the literary and educational movement is more important than any other movement.

Modiful Hoque, publisher of literary books in Bangladesh, said the translation of literary genres could help one get acquainted with the culture and lifestyle of other countries and communities.

Ms. Ajeet Cour, founder chairperson of Academy of Fine Arts and Literature, New Delhi, which sponsored the Programme of Writers Interaction & Literary Exchange, expressed the view that the translated version of the literary texts would be instrumental in exchanging culture among people from different cultural and linguistic backgrounds.

Welcoming the participants, Tulasi Diwas, stressed the need to give continuity to such an interaction programme for the benefit of all.

Diwasa also informed that writers of the SAARC countries would be given opportunity to visit even outside the Valley during the next programme so as to encourage them to come up with creative literary genres in the country.

The seminar was chaired by Shri Kamaleshwar, a prominent fiction writers of Hindi.

Dr. Tirtha Prasad Mishra, Executive Director of the Centre for Nepal & Asian Studies (CNAS) delivered the vote of thanks.

Joint body on local tax suggested

BY A STAFF REPORTER

Kathmandu, Nov. 23: Participants at a meeting related to local tax have pointed out for the need of a joint task force of the local bodies and the private sector to solve the problems related to the collection of the taxes by the local bodies.

At the meeting organised today by the Federation of Nepal Chamber of Commerce and Industry (FNCCI), they said that there should be separate committees at the centre and at local level to solve the problems related to such taxes. They also said the taxes collected should be spent for the development work of the same place and the procedure of collection of tax through contract should be abolished.

The meeting was participated in by Ravi Bhakta Shrestha, First Vice President of the Federation, Third Vice President of the Federation Binod Bahadur Shrestha, former President of the Federation of District Development Committees Madav Paudel, General Secretary of the Municipal Association and deputy mayor of the Kathmandu Municipal city, Bidur Mainali and Federation of the Village Development Committee member, Navaraj Gelal and representatives of the Local Development Ministry and district chambers of the FNCCI.