Commercial Banks At The  Cross Roads

By K.P. Sharma   

Everyday Binita Sharma (name changed), an employee at the Central Post Office, cancels stamps on the letters. It is not unusual because it is her job. But she is often baffled that some of the letters were actually meant to be sent by the couriers.

Many people send letters through couriers for quicker and safer delivery, but some of them are actually sent through the general post.

ìI often wonder when the courierwallahs bring the letters to the post office. They charge so much money from their clients on the pretext of delivering letters quickly and safely, but they are cheating the clients by sending them through the post offices,î says Sharma.

According to her, nearly 50 letters are brought to the Central Post Office daily by different couriers.

However, she refuses to name them. ìThey accept the letters of almost all the destinations when they canít deliver by themselves and they come to us,î she says.

There are 26 courier services operating in Kathmandu. But some of them are making easy money deceiving the people. ìWe know and we have informed about this to the body concerned but it seems the body has not been addressing to them so far,î says Mukunda Poudel, Director General of the Department of the Postal Services.

He blames the lack of proper monitoring of the courier services for this fraud.

Poudel says the courier services should come under the Department of Postal Services for monitoring them better.

Presently, the courier services are taken as small industries and are registered at the Department of Industry.

ìIt is surprising that the courier services are handling the general letters also. By regulation they can only deal with documents and parcels. But they are doing it for years and it is illegal,î Kishor Jung Karki, an official at the Central Post Office says.

ìAlthough we know of these malpractice, we canít do anything but to despatch their letters,î seconds Shreedhar Gautam, chief of the Central Post Office at Sundhara.

However, the fourth amendment of the Postal Services Act has provisions for allowing couriers and private parties to run postal services, but forbids them carrying general letters.

ìBut the provision is not yet implemented and that no such private parties have been registered under the Department of Postal Services for delivering letters or the documents.

Meanwhile, couriers wallahs   do not know whether the postal act forbids them from carrying letters.

ìWe do accept our clientsí letters and carry them to their destination. So far, I have no idea that delivering letters is not under our criteria,î says Manoj Basnet, manager of Kourtier Couriers on what he can do and what he canít.Basnetís courier has been carrying not only documents and parcels but also letters for years to hundreds of destinations both inside and outside the country.

Basnet agrees that some couriers do accept letters from clients even for places where they have no reach and despatch them through the post offices.

Some even come to me to despatch letters and documents to places where they canít, he says.

Meanwhile, Director of the Department of Small Industries Keshab Prasad Poudel agrees that the couriers are benefiting from peoplesí belief on them. But Deputy Director of the Department of Industries Komal Palikhe says that the department has not received any complaints so far regarding the services of the couriers.

He says that the department canít inspect all the industries registered under it. There are about 127,000 small industries of all kinds registered at the Department. However, he says that his department will inspect if they receive complaints.

Of about 30 couriers services, many are thought to  have business exceeding the VAT threshold.

But, Basnet says  his, Kourtier Couriers, is the only one which is registered at the  VAT office.

Besides, there is no limitation on the service charge for delivering the documents and letters. The courier services fix the rate according to their own will.

For example, Express Delivery Services (EDS) charges Rs. 200 to deliver a letter weighing less than 200 grams to Delhi while Express Mail Service (EMS), the courier running under the government owned Postal Services, charges only Rs. 150.

The medium is same and it takes the same time to reach the letter to its destination.

Karki says the postal services EMS is more reliable and faster too, but we charge less.

Responding to why the Central Post Office started its own courier service, Karki said that it was according to the instruction of the Universal Postal Union (UPU).

According to him, the UPU has asked all its member countries to run at least one mail services in the domestic and international sector.

The EMS has been offering the domestic service to its clients since 1990 and international services since 1995.

Gatewaynepal.com Launched In US

By Our Correspondent

Recently, gatewaynepal.com, the Internet website, was  launched in the US. Similar with Yahoo, Excite and Altavista, the website provides links to other wabesites and lets people search according to keywords entered.

According to a press release issued by gatewaynepal.com, the architect and main programmer of the newly launched website is Bimal Pratap Shah who has graduated in Computer Information Technology from the US.

The press release says that hundreds of Nepalese sites are linked to gatewaynepal.com. The site is user friendly and visually appealing to young and old alike.

The gatewaynepal.com has also basic chat facility but soon will have more powerful chat with more features.

The site built with Flash 4.0 also has the facility of  sounds and animation.

Meanwhile, this is the second website exclusively meant for promoting  Nepal and mainly its tourism industry worldwide.

A couple of months back, Thamel.Com, was launched with all the information about Thamel and the Nepalese tourism industry.

With the promotion of websites, the Internet could become  helpful in promoting Nepal in the international arena.

Campaign To Promote Nepal In India

By BMD

In a bid to tap the biggest tourism market for Nepal, Nepal Tourism Board (NTB) has launched a three-month media campaign in four major cities of Indiaó Delhi, Mumbai, Banglore and Calcutta.

Launched on the eve of the resumption of the Indian Airlines flight to Kathmandu, the first ever comprehensive promotional campaign is expected to be instrumental in restoring an image of this Himalayan Kingdom as a safe holiday destination among the prospective Indian visitors.

The Indian tourists cover almost 32 per cent of the total tourist arrival to Nepal. An easy accessibility, favourable weather, cultural similarity, value for money, and other attractions, including shopping, have made Nepal one of the most favourite destinations for the Indian visitors.

In 1997, a total number of 421,847 visitors visited Nepal by air alone. Of them, the number of Indian tourists was 133,438.

 During Visit Nepal Year í98, Nepalese products and destinations lured 143,229 tourists from India. But their number went down by 1.81 per cent in 1999.

In the first four months of 2000, when the Indian Airlines was not operating, only 23,395 Indian visitors came to Nepal, a decline of 37.21 per cent compared to the same period of the last year.

The recent media campaign launched in India comprised television and print advertising, interactions among industry partners of Nepal and India, Internet marketing and direct mail. NTB, a public-private partnership formed for the entire development of tourism, has developed promotional materials based on its marketing slogan like ìMt. Everest & MoreÖ Experience it in Nepalî for the Indian market.

Various print and electronic media like The Times Of India, Anand Bazaar Patrika, Deccan Herald, Femina and Filmfare and Star Plus TV channel, National Geographic and Sony TV have been publishing series of advertisements, informative and promotional materials about Nepal.

 Zee TV which had disseminated negative informations about Nepal during the hijacking of the Indian Airlines plane five months back has started to run fillers entitled ìNepalóDestination Paradise.î The TV channel is airing the fillers free of cost at a special request of NTB.

Besides, the Indian media have also given a lot of coverage to the media campaign.

Pradeep Raj Pandey, Chief Executive Officer of NTB, who recently addressed the press and industry in the first phase of the media campaign, says that one of its significant achievements was the Indian media being positive towards Nepal's tourism industry.

ìIn all the four cities, participation of journalists was encouraging. They were found presenting Nepal in a positive light.î

ìI think, this will help erase the post-hijacking negative publicity about Nepal ,î an optimistic Pandey says.

NTB, in association with Hotel Association of Nepal (HAN) and Nepal Association of Travel Agents (NATA) had launched campaign in the Indian cities.

NATA president Bhola Bickram Thapa and HAN general secretary Ajay Sthapit had accompanied Pandey in the tour.

 Pandey says the interaction between the private sector entrepreneurs of the two countries has helped forge a solidarity  in the tourism industry.

According to him, NTB will again launch promotional campaigns in Bangalore from the last week of July, when the national flag carrier, RNAC, will also be starting its flights.

As part of media campaign, NTB is also organising similar functions in Varanasi, Patna, Ahemdabad and Gujrat soon. Recently, it invited a group of journalists from Delhi. It has plans to bring in similar press trips from Mumbai, Bangalore and Calcutta as well.

He says that the Indian industry complained about an unreliability and irregularity of the services of RNAC in Delhi, Mumbai and Calcutta. They also pointed out drawbacks of hotels and travel agencies during the interaction.

ìWe have already submitted joint reports to RNAC, HAN and NATA after we got feedback from the industry in India. We have asked them to make corrections in them.î

Sthapit hopes that the media campaign will have a good impact at the consumer level and in the promotion of Nepalís tourism industry.

He, however, says that all the trade people selling Nepal were not present during the campaign. ìIn India, there are many people who do not know about Nepal. We have to go on launching promotional activities even in the days to come.î

The total cost of the three-month media campaign in India is Rs. 150 million. NTB plans to conduct similar campaign next year as well. Apart from India, NTB has focussed its promotional campaigns in America, Australia, Japan, German, France and the UK.

Reforming Financial Sector

By Krishna Shrestha

Finally, Nepal Rastra Bank, the central bank of Nepal, has initiated the process of financial reform programme immediately after the announcement of the budget for the fiscal year 2000/01. Last Thursday, amidst a function at a five-star hotel, Nepal Rastra Bank along with Banking Promotion Board organised an interaction programme to discuss on ìA Strategy Paper on Financial Sector Reform Program for Nepal.î

It may be recalled that the government had committed for financial reform at the Nepal Development Forum Meeting held in Paris in April.

The Nepal Rastra Bank in consultation with the Ministry of Finance and the National Planning Commission had drafted the strategy paper. Views of donor communities have also been incorporated in the strategy paper. The strategy paper, presented by Ram Babu Pant, Deputy Governor of Nepal Rastra Bank, deals with various issues related to banking and non-banking sectors, the governmentís role and the role and strategy of the central bank.

The strategy paper says the central bank have to enforce the internationally accepted standards of loan classification and provisioning requirements, liquidity and reserve requirements, capital adequacy requirement, exposure limits, single borrower limit etc. for the effective, efficient and sound banking system.

The paper also says the government and also the central bank need to re-orient their activities from being active participants in the financial sector and should proceed towards as a stronger regulator and supervisor of the overall financial system.

A sound system of corporate governance, necessity of restructuring of the large two government owned banks, improving the existing legal and judicial processes, improving auditing and accountancy standards, promoting financial discipline through adequate disclosure and competition are some of the issues being covered by the paper.

The strategy paper has called for reform in the financial sector legislation, strengthening bank supervision and inspection, restructuring and privatisation of Nepal Bank Limited and Rastriya Banijya Bank, enhancing competition in the banking sector, reforming auditing and accounting capabilities, broad-based banking, streamlining ownership structure, establishing bankersí training institute, restructuring of credit information bureau, revamping research and financial monitoring strength of the central bank etc.

However, the question is, will the initiation of Nepal Rastra Bank fulfill the expectation of Nepalese economists and businessmen as well as multilateral agencies that have been claiming that the financial sector of the country has not been performing well?

At a workshop on ìFinancial Sector Reform in Nepalî organised by the Nepal-USA Chamber of Commerce and Industry on September 6, 1999, Shovan Dev Pant, General Manager of Nabil Bank Ltd. had pointed at the need to define the new financial architecture of Nepal for the new century.

ìThe architecture,î he had said, ìshould be based upon our own introspection on what we did in the past, learn from mistakes and work for improvement.î

He had also talked about the need for a new vision, a changed mindset and a new role to be played  by all players. ìThe Central bank and the government have their own but crucial roles to change the economic fate of the nation.î

At the same programme, Hans M. Rothenbuhler, Country Director of the World Bank to Nepal had said, ìI am afraid the reality is that Nepal has a long way to go in establishing a well-functioning financial sector.î

The World Bank report no. 20229 NEP named Nepal 2000 Economic Update, says, ì While financial sector reform has been under discussion for many years, progress, so far, has been slow.î `The report, which was prepared by a team comprising Para Suriyaarachchi (team leader), Shakti Shrestha and Neena Shrestha just before the Nepal Development Forum meeting held in Paris in last April, stating that financial sector reform is critical issue which needs to be addressed not only because of its importance for private sector but also for ensuring macro-economic stability.

As stated by Dr. Tilak Rawal, Governor in Nepal Rastra Bank, ìThe initiation of financial sector reform process dates back to mid 80s when measures such as deregulation of interest rates, liberalised licensing policy, full convertibility of foreign exchange in current account and joint venture participation in the financial sector were initiated.î

As a result of financial sector reform there are 13 commercial banks, 46 finance companies, five rural development banks, seven development banks apart from cooperatives and non-governmental organisations doing limited banking activities. However, questions have been raised on performance of most of the banks.

However, the latest budget presented by Finance Minister Mahesh Acharya on 30 May 2000 for the fiscal year 2000/01 has also stated that the government would take various measures for financial sector reform and the development of the private sector.

Governor Dr. Rawal speaking in the interaction said, ìThe budget document contains a number of things about financial sector reform and has reposed immense confidence in Nepal Rastra Bank for the implementation of the program. HMG/N looks serious about financial sector reform program which is amply demonstrated, amongst others, by the allocations of Rs. 600 million for this purpose.î

However, Dr. Rawal said, ìThe initiation of reform measures, in my opinion, should be followed by further reform and consolidation in the institutional aspects of commercial banks and other financial institutions. The reform programme should aim at supporting the private sector led economic growth through increased resources allocation to potential growth sectors, and the reform of the banking sector in general and restructuring of the two large commercial banks in particular.