WB reacts to NRB governor's case

The World Bank (WB) today releasing a press note said that media reports — on the court verdict against Nepal Rastra Bank (NRB) governor Bijay Nath Bhattarai and executive director Surendra Man Pradhan — including the World Bank has drawn its attention.
"The World Bank has been supporting Nepal's financial sector since 2003, most recently through the Financial Sector Restructuring Programme, which is designed to support Nepal's efforts at developing a healthier financial sector for private sector development, investment and faster growth," stated a press release. "Under this project the World Bank gave its no objection to a contract between NRB and a consulting firm to help improve supervisory capacity at the NRB."
The media has reported that prior approval was not sought from the World Bank for the release of payment to the consulting firm. "The Bank procedures do not require prior clearance by us for payments made against contract conditions agreed between the implementing agency – in this case Nepal Rastra Bank – and the firm it hired for consulting services," stated the release.
Execution of contracts is the responsibility of the contracting party and payments are governed by the terms and conditions of the contract. The World Bank reimbursed this contract payment of $51,538.32 on November 8, 2006 to NRB. "It made this payment from a grant window. Its technical experts found that the work done by the consulting firm was satisfactorily carried out against the terms of their contract," the Bank claimed.
The World Bank then gave its no objection to NRB's proposal to terminate the contact when the consulting firm repeatedly failed to replace its team members as provided in the contract. It claimed that it is also conducting its own inquiries into the matter. "The World Bank is expected that a draft report will be shared with Nepal government by May 2008," the release stated.