NRB Strategy

THE banking and finance sector has seen a big growth in the country over recent times. Liberalisation of the sector has encouraged many investors to jump in. The liberal banking policy that started in the mideighties created the space for more financial institutions to come up. At present, they include 14 commercial banks, 47 finance companies, 35 cooperatives and 25 non-governmental organisations with functions similar to that of a financial institution. Thanks to the mushroom growth of banks and other financial institutions, the average client has an array of financial institutions to choose from for his/her related needs. But the growth in the banking and finance sector has not come without problems. In more recent times, there has been a growing concern that due reforms of the sector had not been thought of and implemented. Particularly, close monitoring of these financial institutions is conspicuous by its absence. There have been instances when financial institutions have just vanished with depositors’ money. Lack of transparency about these financial institutions often means that a depositor is unaware of its true financial position. For example, it has been difficult for an average client of the two largest commercial banks—Rastriya Banijya Bank (RBB) and Nepal Bank Limited (NBL) —to have a true picture of their finances. That is so because their accounting and auditing systems are not up to the mark. The institutions are not transparent. The two banks, that hold two-third share of the financial market of the country, have been much in the news recently for their shaky financial positions. What is making the matters worse is that flow of information regarding their financial status is not forthcoming. There are other financial institutions too which stand on unstable foundations because their investment has not gone to productive sectors.

It is against this backdrop that Nepal Rastra Bank’s (NRB) announcement of a long-awaited strategy which aims to reform the financial institutions should be heartily welcomed. The new strategy is aimed at enhancing the security to depositors, encourage them to invest in productive sectors, facilitating flow of financial information, promoting transparency in transaction, adopting a modern and well-managed auditing system, developing money market and encouraging the flow of export credit. That is a lot of things to be done. For the start, NRB would do well to concentrate its energy and time on restructuring NBL and RBB and assure these banks’ clients that these banks will not be allowed to run as before.

Ban On Old Vehicles

IN view of the adverse impact on air pollution caused by the increasing number of vehicles in the Kathmandu Valley and other sub-metropolitan cities and municipalities, the government, under Clause 7(3) of the Environment Protection Act 2053 B.S. has banned all vehicles manufactured or produced on or before 1980 from operating in Kathmandu Valley from Mangsir 1, 2058 B.S. The ban will cover all government or privately-owned vehicles running on diesel or petrol. Likewise, while the new registration of such vehicles will be stopped with immediate effect in the Valley, all government, corporation, public or privately operated two stroke petrol or gas operated three-wheelers will be totally banned from running within the Kathmandu Valley from the same deadline mentioned above. The government’s latest move can be said to be a sequel to its previous decisions to ameliorate the growing air pollution problem felt in the Valley due to the exhaust fumes spewed out by old vehicles. More so by the diesel and petrol-operated three-wheelers which, thanks to the government’s timely initiatives, have been banished from the streets of the Valley and replaced by gas and solar-powered ones. But despite the government’s commendable measures, the Valley is still having to grapple with the vexing air pollution problem. One ready reason for this could be the voluminous exhaust fumes still being spewed out by the old buses, trucks, tankers and cars plying the thoroughfares of the Valley. And, of course, by the two-stroke petrol or diesel operated three-wheelers.

Now that the government has come up with a clear-cut deadline to totally ban vehicles manufactured or produced 20 years ago, it looks to reason on the part of the concerned authorities to put their phasing-out act and measures together. The very fact that so many vintage vehicles, despite a battery of anti-pollution tests being currently administered by the concerned personnel, are still plying the streets of the Valley with impunity does give the impression that the some wily owners of such polluting vehicles are managing to find some loopholes to circumvent these tests. While the urgency to come up with more sophisticated anti-polluting tests to nab the polluting vehicles and their owners is always there, strict implementation of the existing anti-pollution measures by the concerned personnel could not only act as ready deterrent against all those unscrupulous vehicle owners dent on by-passing the anti-pollution rules but also lead to a gradual phasing out of the polluting vehicles from the already congested roads of the Valley.