Market shows little impact after revised CRR

By Rajkumar K.C.

KATHMANDU, Sept. 4: Nepal Rastra Bank's move to inject Rs 1.75 billion to create extra liquidity in the banking system, by whittling down the compulsory Cash Reserve Ratio (CRR) since July 17, has failed to generate a 'visible impact' in the money market until now.

The CRR that was cut down by one percentage point has neither induced investments nor created any economic activities, say economists, although it might be too early to form an opinion about the new policy.

They say - the NRB's policy of creating extra liquidity to support investment in the needy areas has so far failed.

However, Governor of NRB Dr. Tilak Rawal while announcing the new monetary policy on July 15 had affirmed that with the reduction of the CRR, the cost of fund would decline and enable commercial banks to provide more soft loans.

The amount of liquidity until the second week of July was Rs 39 billion, which, according to NRB officials, 'was not sufficient to rejuvenate' the ailing economy. Therefore, the NRB had trimmed down the CRR for the second time in six months in order to pump up more liquidity.

The NRB had already slashed the CRR by one percentage point in early January with the objective of inflating the size of the liquidity. "But that also could not make any significant impact on the economy. Despite the claim by the NRB, the slashed CRR has also failed to make any visible impact," said Prof. Guna Nidhi Sharma.

Prof. Sharma does not see any positive impact on the money market following the scraping of the spread rate in commercial banks.

Said he, "The NRB has to review its policy as to why the slashing of the CRR has failed to trigger any effect."

According to ' the Banking Operation Department' at Nepal Rastra Bank (NRB), there has been no change in the liquidity at all. The amount of liquidity in the market is around Rs. 39 billion.

"There is no liquidity problem. Many banking and financial institutions are still looking for avenues to invest. They already had excess money to invest. So the CRR was cut down in imitation of the Federal Reserve Bank of India," said former acting vice chairman of the National Planning Commission (NPC) Dr. Raghav Dhwoj Pant.

The NRB Act 2058 has clearly elaborated the NRB's function, according to which it is entitled to maintain price stability and improve the balance of payment (BoP).

The NRB, the central authority of the monetary system, had, thus, introduced a new policy to bring significant change in the country's monetary system.

On the one hand, the BoP has recorded a deficit. Despite modest growth in deposits, a sluggish credit demand has led to a decline in the interest rate of the treasury bills and in the inter-bank market. On the other hand, the market has failed to respond to the changes due to non-economic factors.

Dr. Yuba Raj Khatiwada, executive director of Research Department at the NRB also admitted that the revised CRR has failed to generate an impact. "It is too early to make an opinion about the new policy as last month's data have not been received from various banking institutions."

He said the liquidity position is as comfortable as before. Asked, to what extent the banking system has been influenced by the action of the Commission for the Investigation of Abuse of Authority (CIAA), Dr. Khatiwada said, " No remarkable incidence has taken place so far."

It is said that the tendency of withdrawing deposits from various banks is on the rise following the CIAA's move. There is a thin possibility of capital flight and the possibility of hoarding money cannot be ruled out.

Regarding the impact of the revised CRR in the money market Narendra Kumar Bhattarai, president of the Nepal Bankers Association, said that Rs. 1.75 billion is a small amount to make a significant change in the market.

According to the NRB, domestic credit of the banking system has registered a slower growth of 9.1 per cent, that is Rs 17.04 billion till mid-July. Besides, the banking sector's credit to the private sector has gone down to 5.9 per cent from 15.8 per cent. Similarly, broad money supply has declined to 5.5 per cent from 15.2 per cent while narrow money growth has also slowed down.

Ultimatum issued to return development money

RSS

NEPALGUNJ, Sept. 4: Banke District Administration Office has asked the former people's representatives and other individuals recommended by them who were involved in drawing around Rs. 2.5 million as advance in the name of development to return the amount within seven days.
CDO of Banke Dhruva Raj Wagle said the amount has not been collected even after repeated notifications in the past and the present ultimatum was given following a recommendation by the district development committee.

He also made it clear that legal action would be initiated against the 78 individuals if they failed to return the money.

The amount has remained in arrears since many years in the name of former MPs, former DDC chairmen, former VDC chairmen, DDC members and other people's representatives, it is learnt.
Among those prominent persons in the long list of individuals are former minister Fatteh Singh Tharu who owes Rs. 125,000, the son of ex-minister Prem Bahadur Pandey Surendra Pandey Rs. 555,000, Puran Singh Shrestha Rs. 162,000, Hardev Baks Chaudhary Rs. 112,000, ex-MP Krishna Singh Pariyar Rs. 4,800, Narendra Chaudary Rs. 45,000 and others.

HURON offers support in govt-Maoist talks

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POKHARA, Sept. 4: Central president of the Human Rights Organisation of Nepal (HURON) Sudip Pathak has said that HURON could play the role of a facilitator if the government and the Maoists create an atmosphere of confidence for a lasting peace by ending violence and killings going on in the country.

Pathak made the remark while addressing a press meet here today.

The Maoists are willing for talks if His Majesty's Government creates a conducive environment for the dialogue, Pathak said, adding information has been received from the Maoists that they would declare a ceasefire in two hours if such a condition was created.

He said a team of the HURON's officials during its visit to 30 districts in the nine months after the imposition of the state of emergency in the country found out that 60 per cent of young men and women had left their villages for India and other third countries, 70 per cent of the industries and factories had been facing economic problems, educational and health institutions had been closed and there was no presence of government at a distance of two hours from the district headquarters in 28 districts.

Central advisor of HURON Malla K. Sundar, general secretary Yogendra Man Bijukchhe, district president Tara Baral and Human Rights activist Birendra Keshari Pokharel also expressed their views at the press meet.

Unity of democratic forces emphasised

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BUTWAL, Sept. 4: President of Janamorcha Nepal Amik Sherchan has said that as Maoists are hatching a conspiracy to finish off democracy, responsibility to find a lasting remedy has fallen upon all.

Speaking at a meet-the-press organised by Federation of Nepalese Journalists (FNJ) Rupandehi Unit, Sherchan pointed out the need of unity among all democratic forces to avert a counter movement given the uncertainties prevailing on every front in the country.

It is not a remedy to hold election, he said, adding that it is, after all, the government, which should strive for creating an atmosphere conducive to hold talks with the Maoist rebels.

It is the need of the hour to hold talks with Maoists so as to ensure fundamental rights of general people, safeguard democracy and meet the basic needs of the citizens, he remarked.

Party central member Chitra Bahadur K.C. termed the Maoists' armed struggle as killing of people and criminal activity and viewed destructive activity being intensified by the Maoists as a plot to thwart communist movement and nationalism at a time when the majority of political parties favour abolition of the state of emergency.

FNJ vice-president Suman Adhikary chaired the meet at which Deepak Gyawali and treasurer Yam Lal Bhusal also expressed their views.

Terrorist attacks in various places

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KHANDBARI, Sept. 4: A band of Maoist terrorists exploded a pressure-cooker bomb at the house of outgoing MP Tanka Prasad Rai at Khandbari Municipality-4 in Sankhuwasabha district at a round 10:00 p.m. last night and also set the house on fire by sprinkling kerosene, according to Sankhuwasabha district police office.

Rai said that the Maoists had ordered all the people in the house out and warned them against making any noise before setting the house on fire.

Clothes, utensils and foodgrain have been gutted in the fire at the house which lies about five kilometres away from the district headquarters.

Rai said he came to his house this morning after hearing of the incident.

Similarly in Dhulikhel, Maoist terrorists on Tuesday night attacked and burnt important documents in nine village development committees (VDCs) located in the remote areas of Kavrepalanchowk district, says the Kavre DDC.

The VDCs coming under the attack of the terrorists were Katunje, Mangaltar, Sipali Chilaune, Mecche, Shikharambote, Suryakharka, Sisakhani, Madhurapati and Kharpachok.

A few day ago the terrorists had also attacked 11 other VDC offices and burnt official documents there.

Meanwhile in Chautara, a group of unidentified vandalised the office of the Bhadrakali Secondary School located at Maneswora village development committee at midnight and destroyed property worth about Rs.25,000, according to headmaster Rajkumar Bhattarai.

The unidentified persons destroyed the furniture and looted some cash from the school.

The damage caused to the furniture of the office came to light after the school opened the next day.
In Hetauda, Maoist terrorists last night set fire to the house of Shukra Prasad Lamichhane at Hariya Village Development Committee (VDC), ward No. 7, in Makawanpur district.

The terrorists ordered all the family members out of the house and took them under their control and lifted valuables, foodgrain and TV set from the house.

The security forces recovered a socket bomb and a TV remote control from the site of the incident this morning.

It is suspected that the Maoist attack was to settle score with Lamichhane's son who is serving the Royal Nepalese Army.

In Bhairahawa, a group of Maoist terrorists hurled a petrol bomb at the vehicle of the Rupandehi District Administration Office parked at Shankernagar-5 along the Siddhartha Highway and caused damage to the vehicle this morning.

According to Rupandehi District Police Office, the terrorists had hurled the petrol bomb at the vehicle which had gone to pick up Assistant Chief District Officer Ganga Bahadur K.C. at his residence located at Shankernagar-5 while it was being parked along the road and the driver had gone to inform the Assistant Chief District Office about his arrival.

The police has arrested a suspected person in connection with investigation, according to DSP Maya Kumar Shaha.

Environmentalists call Earth Summit 'failure'
Coordination in relief works stressed

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NEPALGUNJ, Sept. 4: Extensive coordination is to be maintained between the bodies concerned for the effective implementation of the community-based natural calamity preparedness and community health promotion programme in Banke district.

The decision to this effect was taken at a "Governmental bodies and non-governmental institutions/associations coordination seminar" organised by Nepal Red Cross Society, Banke District Chapter for the effective implementation of those programmes.

Chief District Officer and chairman of the Banke District Natural Calamity Rescue and Relief Committee Dhruba Raj Wagle was the chief guest at the seminar.

The district Red Cross officials, administrative, police and office chiefs, teachers, college lecturers, office-bearers of various national and international NGOs working at the community level, journalists and others attended the seminar.

At the seminar, it has been decided to constitute a natural calamity relief and evacuation team under the chairmanship of the Chief District Officer with the president of the district Red Cross Society as member-secretary.

On the occasion, Chief District Officer Wagle pointed out the need for proper identification of areas vulnerable to natural calamities such as flood, fire, river scouring and pestilence. He also stressed the need for all the responsible NGOs and social agencies to pay attention to the quality and promptness of services in such areas and transparency in relief works.

Programme coordinator of the district Red Cross Society Ishwari Prasad Regmi said the district Red Cross has been implementing natural disaster management and the community-based health promotion programmes in the district.

At the programme presided over by Nepal Red Cross Society Banke district president Narbada Sharma, vice-president Ajit Sharma and general secretary Shanti Shrestha and others also expressed their views.

Banke district Nepal Red Cross Society has set up 23 community institutions in nine VDCs of the district for implementation of the community-based natural disaster preparedness programme.

World's 10% population disabled

By A Staff Reporter

KATHMANDU, Sept. 4: The United Nations estimates that 10 per cent of the world's population is disabled. But the disabled are not getting the facilities and the opportunities they are entitled to, and this situation prevails even in the developed countries, said visiting UN special rapportoire on disability Bengt Lindquist at a workshop today.

The one-day workshop discussed the role of the UN Standard Rules on Equalisation of Opportunities for Persons with Disabilities. These rules were designed by Lindquist himself with the aim to guarantee equal rights to the disabled. He said that the policies should include the disabled.

Creating awareness on disability and formulating new strategies for the disabled are the main objectives of the workshop. Furthermore, it will discuss the implementation aspects of the UN standard rules, said Lava Kumar Devkota, Secretary at the Ministry of Education and Sports.

Lindquist, who is blind, is visiting Nepal and the South Asian region, for the first time after his appointment as the UN Special Rapportoire for disability. He said the workshop will be useful in bringing forth the causes of disability.

He said that policies were being framed as if there were no disabled people around. The UN has designed 22 standard rules on Equalisation of Opportunities for persons with disabilities, but very few are implemented, said Lindquist.

State Minister of Education and Sports Narayan Prakash Saud said the visit by such a high UN dignitary was a historical event. He asked the concerned to maximise the importance of his visit and added it was inspiring. The government is fully committed to elevate the conditions of the disabled in the country, he said.

A separate international convention on "The Equalisation of Opportunities for Persons with Disability" is needed to equalise the rights to all the disabled around the globe as the rules are not mandatory to follow, said Munishwor Panday, president of the Federation of Nepalese Disabled.

Although there are 22 UN rules to equalise opportunities for the disabled, only a few agencies are aware of these rules. Even UN agencies and governments are partially aware of the rights of the disabled, said Panday.

Disabled persons should be taken into the mainstream as they too are members of the same society, said Lava Kumar Devkota, secretary at the Ministry of Education and Sports.