NOC bucks fuel hike trend, but fails to win hearts

Contrary to popular perception, that what goes up in Nepal never comes down, Nepal Oil Corporation (NOC) — the state monopoly — has bucked the trend.
For the first time in its 38-year history, NOC has slashed the price of petrol by Rs 5 per litre.
Petrol costs Rs 95.50 per litre in the Valley as per the rate of Nepal Petroleum Dealers' Association (NPDA), which has overruled NOC, albeit marginally.
However, experts feel that there is a dire need of proper mechanism on price adjustment.
Dr Shankar Sharma, former vice-chairman, National Planning Commission (NPC), panned the ad-hoc decision.
"It was a great opportunity to work out the price mechanism. But the decision was taken in haste. No proper homework went into it. Such decision won't bring sustainable solution," he said. Though, NOC has said that it would revise the price every 15 days — as and when it gets the new price list from its sole supplier Indian Oil Corporation (IOC) — it is yet to work out on the price mechanism that will be in sync with the international price.
International price is key and then comes the tax. "The need of the hour is to work out pricing formula. If there is transparency, consumers will not feel cheated as and when there is revision in prices. Time is ripe for restructuring of NOC management as well,"
he added. Dr Sharma knows a thing or two about the working pattern of the state oil monopoly. He had headed a committee, which looked into restructuring of NOC and its management.
NOC had raised the petrol price to Rs 100 per litre when the global fuel price was at its high of $145 per barrel. But there has been a drastic fall in crude price since then. At present, it is hovering around $70 per barrel (159 litres).
"The international price has come down to half and NOC has reduced the price of petrol by Rs 5 per litre," said Jyoti Baniya, general secretary, Consumers' Forum. He accused the government body of deceiving consumers. "It's a crime. To begin with, it's a delayed-decision. Second, the cut should have been in tune with global rates. NOC has forced consumers to pay its loan and tax as well," alleged Baniya.
NOC refused to take the global cue had it not for the mounting pressure from consumers, Constituent Assembly members and students unions.
According to NOC data, it makes a profit of around Rs 16 per litre in petrol, thanks to the dip in OPEC crude prices. But it reduced only Rs 5 in a litre.
NOC has now promised to receive price after it receives a list from the IOC on every 2nd and 16th of the English month.
The state fuel major has also reduced the price of Air Turbine Fuel (ATF) by Rs 4,100 per kilolitre, from $1,500 to $1,400 per kilolitre. But on what basis, noone knows.

NADA cries foul over adulterated petrol

Turpentine - a liquid chemical used in painting - has become the new fizz of bucks for blackmarketeers lately.
Though the government has banned turpentine, it is still found in abundance in petrol. Adulteration is more when there is scarcity of petroleum products.HH&Company — the sole distributor of Bajaj bikes in Nepal — director Shekhar Golchha said "The suspicion lingers that these days some petrol pumps are mixing turpentine in petrol.
"Earlier, kerosene used to be mixed in petrol but now the more deadly substance for the automobile engine, turpentine, has been detected in the petrol, he said adding that it causes the engine to seize.
Nepal Automobile Dealers' Association (NADA) has urged consumers - especially bikers - to ask for recipts while filling petrol from the petrol pumps. "It is so that we can take action, if the petrol is found adulterated," said Laxman Ratna Tuladhar, managing director of Syakar Company Ltd - the sole distributor of Hero Honda in Nepal.
"Due to rampant adulteration of petrol, bikes are having serious problems," said Bishnu Agrawal, director of Morang Auto Works (MAW) - the sole distributor of Yamaha bikes in Nepal.
"Around 15 per cent to 20 per cent of the newly-sold bikes are being retured before they run even 100 km," he said adding that the level of the adulteration of petrol was increasing.
A NADA team, led by its president Sunil Khetan, met finance minister Dr Baburam Bhattarai today and apprised him of the problem. Dr Bhattarai suggested they make consumers aware of the problem and that consumers should ask from payment fereipts from the petrol pumps after taking petrol so that erring petrol pumps could be identified and action taken against these.
The NADA team also met Digambar Jha, managing director of Nepal Oil Corporation (NOC) and Minister for Commerce and Supplies Rajendra Mahato yesterday to complain of adulteration.According to NADA, the problem of turpentine in petrol is rampant in the eastern region and in the valley.
Petrol sold in Birgunj has lead also, apart from turpentine. However, according to NOC the petrol it supplies is free of lead. "The manufacturers won't take guarantee if the engine seizes due to external substances," several distributors of bikes said adding that they were concerned as they were losing customers.
"Customers blame us, but we can do nothing until the customer helps us by informing us from where they got the petrol and produce payment receipts," MAW director Agrawal said.

Petrol price slashed

The state-run Nepal Oil Corporation (NOC) has announced Tihar bonanza. Taking a global cue, the NOC has slashed the price of petrol by five rupees in a litre, effective from this midnight. "A litre of petrol costs Rs 95 from tonight," states a press release of the NOC, the oil monopoly.
However, the prices of cooking gas and kerosene remain unchanged.
"Uniformity has struck as far as the dual price of diesel is concerned. It will now cost Rs 70 per litre as compared to the earlier price of Rs 80 and Rs 70 respectively. Similarly, the price of Air Turbine Fuel (ATF) has also been reduced, from $1,500 to $1,400 per litre," said the NOC.
But, Nepal Petroleum Dealers' Association (NPDA) has come up with its own rates, which are marginally higher than the NOC price.
"A litre of petrol will cost Rs 95.50 in the Valley," said Saroj Pandey, president, NPDA.
Earlier, the petrol price had shot up to Rs 100 per litre in consonance with the global high of $145 per barrel.
However, of late there has been a sharp drop in fuel prices due to the ongoing global financial meltdown. It is hovering around $70 per barrel (159 litres).
The NOC had been under tremendous pressure to slash the prices.
Data reveals that the oil monopoly is raking a profit of Rs 25 per litre on an average in ATF. While, the gains are around Rs 16 per litre in petrol, thanks to fall in OPEC prices.
A team of Constitutional Assembly Members, led by Nabindra Raj Joshi, a CA member from Kathmandu constituency number 8, had met Rajendra Mahato, Minister for Commerce and Supplies, at his office in Singh Durbar yesterday to press for the price adjustment.
The NOC had been incurring a monthly loss of Rs 320 million in view of the global price hike.
According to the recent list sent by the Indian Oil Corporation (the sole supplier to the state-run monopoly) to the NOC, the latter had made a profit of around Rs 10 million as on October 16. NOC receives the revised list from the IOC on every 2nd and 16th of the English month. The state oil monopoly is making the arrangement that the price will go autometically up or down, according to the international price.

Know Your Bank III

Nepali commercial banks are doing well despite the prevailing global financial crisis. They are pretty much insulated because they are less exposed to global fluctuations. Also, Nepal Rastra Bank (NRB), the regulatory authority, is very vigilant and keeps a hawk's eye on banks despite manpower crunch. However, whether a small economy like Nepal can sustain more banks or not is still a million dollar question. Let's have a look at the financial health of banks for the fiscal year 2008-09.

4. Nepal Investment Bank Ltd (February 27, 1986)
Chairman/CEO: Prithivi Bahadur Pande
MD: Jyoti Prakash Pandey
Paid up capital: Rs 1,203,915,400
Core capital: Rs 1,852,197,400
Net Profit: Rs 697 million
NPA: 1.12 per cent
Networth: Rs 26,86,786,000
Earning Per Share: Rs 57.87
Price earning Ratio (P/E): 42.33
Branches: 21
ATMs: 40

7. Nepal SBI Bank Ltd (July 7, 1993)
Chairman: B K Shrestha
Managing DirectorL: N K Chari
Paid up capital: Rs 87,45,27,840
Core capital: Rs 1,14,54,78,649
Net Profit: Rs ...
NPA: Rs 45,87,55,741
Networth: 1,15,33,13,329
Earning Per Share: Rs 39.55
Price earning Ratio (P/E):
Branches: 23 (extensions + branches)
ATMs: 12

15. Machhapuchhre Bank Ltd (October 3, 2000)
Chairman: Surya Bahadur KC
CEO: Bhai Kajee Shrestha
Paid up capital: Rs 901,339,300
Core capital: Rs 1,143,996,282.47
Net Profit: Rs 88,755,880.75
NPA: 2.29 per cent
Networth: Rs 1,164,373,223.89
Earning Per Share: Rs 10.80
Price earning Ratio (P/E): 118.96
Branches: 21
ATMs: 15

19. Global Bank Ltd (January 2, 2007)
Chairman: Chandra Prasad Dhakal
CEO: Anil Gyawali
Paid up capital: Rs 700 million
Core capital: Rs 723 million
Net Profit: Rs 6.12 million
NPA: 0.18 per cent
Networth: Rs 723 million
Earning Per Share: Rs 8.75
Price earning Ratio (P/E): N/A
Branches: 7 Branches (Kantipath, New Road, Birgunj, Pokhara, Baglung, Biratnagar, Lahan)
ATMs: 6

23. Sunrise Bank Ltd (October 12, 2007)
Chairman: Tolaram Dugar
CEO: Kishore Maharjan
Paid up capital: Rs 700 million
Core capital: Rs 685 million
Net loss: Rs 24 million
NPA: 0
Networth: Rs 685 million
Earning Per Share: Negative
Price Earning Ratio (P/E): 0
Branches: 6 (at present 10)
ATMs: 0

Development Bank
Sanima Bikas Bank Ltd (December 12, 2004)
Executive Chairman: Badri Prasad Ojha
Paid up capital: Rs 384 million
Core capital: Rs 429 million
Net Profit: Rs 22 million
NPA: 1.51 per cent
Networth: Rs 4,327 million
Earning Per Share: Rs 5.74
Price earning Ratio (P/E): 249 times
Branches: 3 (New Road, Damak, Dhadingbesi)
ATMs: Affiliated to SCT Network

ADB grant in millions to boost local govt bodies

The Asian Development Bank (ADB) has come forward to help Nepal improve local governanceand promote community development. The international body has pledged a grant worth $106.3 million.
The aid will be disbursed in three phases. It will support the active engagement of communities in local governance, improve resource management and dispensation of service. Local government agencies will play a key role in implementation of the much-needed project.
Perhaps, the ADB grant could not have come at an opportune time for the Maoist-led government, which is gradually veering towards a federal structure.
In fact, the Three-Year Interim Plan (fiscal 2008-2010) has put forth decentralisation as theprimary means for good governance.
“It will support the government’s move. Local bodies can be strengthened as it will prompt them to take several community initiatives. There is a greater focus on inclusive development as well,” said Gambhir Bhatta, a senior official, South Asia department, ADB.
The programme will undertake novel ways of monitoring local finances by incorporating gender equality and social inclusion indicators; administering safety nets and social assistanceprogrammes to the underprivileged; budgeting grants to key sectors like education, health and agriculture. There will be a greater coordination among the districts.Altogether the ambitious scheme is estimated to cost $470 million. The government has pledged $260.8 million for it.A follow-up ADB programme grant, amounting to $50 million, is envisaged for a three-year period (2012-15).
It will largely focus on policy reforms.

Peace without economic development not sustainable

Peace cannot be sustainable without economic development, Prime Minister Pushpa Kamal Dahal 'Prachanda' said while inaugurating the two-day 'National Symposium on Public-Private Partnership (3P) 2008' here today.
"Nepal not only needs peace but also economic development to sustain that peace," he said adding that the PPP model was a fast track route and the best alternative to development of Nepal.
Coupled with the cooperative movement it can bring about change, he opined. He, however, admitted it was a tricky task to link the cooperative movement with PPP. Prachanda said PPP was required to build big projects. "Local people can themselves build small and medium size development projects," he added.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Kush Kumar Joshi urged the government to have conceptual clarity about the PPP model. "Clarity in concept will help strengthen trust and take ownership to new levels," he added. He also stressed on strong relationship between private and public sectors for rapid economic development.
Speaking on the occasion, UNDP resident representative Robert Piper said only the PPP model could help the government implement its fiscal plan.
Minister for Local Development Ram Chandra Jha said national capitalists can be encouraged for the economic development. "The government is working for reforming all the laws and acts, which are creating hurdles in utilising the PPP to its fullest.
With the slogan, 'Foundation of Economic Development through Public-Private Partnership', the two-day national symposium has been jointly organised by FNCCI, Ministry of Local Development and UNDP to promote private sector investment for economic development.
Participants will brainstorm on the issue and various aspects of public-private partnership. The symposium will mainly focus on the possibilities of public and private partnership in six areas of interest that includes tourism, local development, education, health, agriculture and infrastructure development.After the inaugural session, experts held discussions on tourism development through PPP.
Tourism in Nepal has a grand history but now it's time to modernise those traditions, they said adding that however, with time expectations of tourists arriving in Nepal has been increasing by the day.Senior tourism entrepreneur Karna Shakya said, "Tourism is a dynamic industry. Therefore, people engaged in it should update themselves to keep abreast of changing times." He added, "Now there is the need for health tourism, educational tourism, agro tourism, adventure tourism and sports tourism," he said.
Citing examples set by the US in educational tourism, Shakya said, "In the US, there are 40,000 Chinese students who have gone there for further education. We too should also focus on different aspects of tourism. Tourism isn't confined merely to just the arrival of tourists in Nepal, it's also about how to earn more by providing them opportunities for spending more here."
According to Shakya, if the country is able to organise sports tourism of international standards, a number of multinational companies would be willing to provide courtesy facilities and this would be possible only through PPP.
Minister for Tourism and Civil Aviation (MTCA) Hisila Yami said that along with paragliding, hot air ballooning and bungee jumping there is the facility of skydiving now in Nepal. She added, "Privatisation and industrialisation is what we are mainly focussing. Tourism is a vibrant industry though the government has given it third-most priority. Yet, through PPP we can spur the tourism industry far ahead in no time at all. Still, we need the support of the government, private sector and workers.
Secretary to the MTCA Leela Mani Poudyal said, "Tourism and civil aviation are key areas of Nepal's economy. Tourism infrastructure is government business and the services are mostly private sector business. Civil aviation infrastructure is public sector business till today."
Poudyal added that in the civil aviation infrastructure the government ought to provide a capital subsidy in the form of a lump sum grant or land or other resources to the private sector so that it could develop infrastructure, create services and operate for a given number of periods. He pointed out that, conversely, the government also could invest certain sum of money and let the private sector own majority shares, manage and run the business, just like airport terminals.
According to Poudyal, implementing the PPP model of management in Nepal Airlines Corporation (NAC) is a priority issue and the ministry is making steady progress in this regard.

NRB bid to maintain confidence in banks

Nepal Rastra Bank (NRB) has introduced Prompt Corrective Action (PCA) - a new directive effective from October 17 - if financial institutions do not maintain minimum Capital Adequacy Ratio (CAR) every month, unlike the previous three-month duration earlier.
CAR - an indicator of financial capital strength - is a measure of the amount of a bank's capital expressed as a percentage of its risk weighted credit exposure.All financial institutions - in A, B and C classes - licenced by NRB will have to mandatorily maintain minimum CAR every month prescribed by it, said acting NRB governor Krishna Bahadur Manandhar.
Under Basel II, commercial banks have to maintain a minimum of 10 per cent CAR while development banks and finance companies - financial institutions in B and C classes - will have to maintain 11 per cent CAR, under Basel I.
"If any institution falls short of the prescribed CAR any month, the central bank will immediately take action against it," Manandhar said, adding that this new regulation will make financial institutions more disciplined and stabilise the financial market.
"NRB defines and monitors CAR to protect depositors, thereby creating confidence in the banking system," he added.
There are various actions that the regulatory authority of the financial market would take against institutions failing to maintain the minimum CAR. "If an institution falls short of maintaining CAR by upto two per cent, it cannot announce its dividends and bonus shares," states the NRB directive.
Similarly, if a financial institution's CAR is less than two to four per cent, NRB will put a cap on its lending capacity. If CAR falls short from four to six per cent, the central bank will not allow a financial institution to open a deposit account and will suspend its lending activities. If the institution has less than six to eight per cent shortfall in its minimum CAR, it will not be allowed to pay salary, allowance or any kind of benefit to its staff . It also cannot promote or recruit new employees.
However, if the minimum CAR is less than eight per cent and over, the financial institution will be declared 'problematic' and action taken against it according to section 86 of the NRB Act. "If the financial institution cannot maintain its minimum CAR within six months of being declared 'problematic' also, its licence will be terminated and the company marked for liquidation," says the NRB directive.CAR is the ratio, which determines the capacity of the bank in terms of meeting time liabilities and other risks such as credit and operational risks. In the most simple formulation, a bank's capital is the 'cushion' for potential losses, and which will protect the bank's depositors or other lenders.

25 defaulting firms in Nepse dock

Nepal Stock Exchange (Nepse) today froze the share transactions of 25 companies after they defaulted on their renewal fees for this fiscal year.
Two hydropower companies - National Hydropower Co Ltd and Butwal Power Co Ltd - of the three listed hydropower companies, and two insurance companies - Rastriya Beema Sansthan and National Life Insurance Company Ltd - failed to pay renewal fees.
The failure of these companies to cough up the renewal fees at ahe time when the secondary market is feeling jittery, has made investors even more nervous. Nepse, however, clarified that their trading would resume after they pay their renewal fees.
According to the rule, listed companies must pay their renewal fees within the first quarter (three months) of the fiscal year. Failure to do so will result in halting of share transactions at Nepse.
Hotel Yak and Yeti - the only hotel among those listed under the hotels group that had not paid its renewal fee last fiscal year also - and some financial institutions are also barred from trading from today until they pay their renewal fees.
Some of the companies are not in operation. These have to pay from Rs 15,000 to Rs 50,000 as renewal fees. Once they pay renewal fees, they also will be allowed to resume their shares' transactions.


Defaulters in the dock
1. BiratLaxmi Bikas Bank
2. Harisiddhi Eita Thata Tile Karkhana Ltd
3. Bhrikuti Pulp and Paper
4. SriRam Sugar Mills
5. Yak and Yeti Hotel Pvt Ltd
6. Butwal Power Co Ltd
7. Nepal Trading Ltd
8. Rastriya Beema Sansthan
9. Alpic Everest Finance Ltd
10. Cosmic Merchant Banking and Finance
11. Patan Finance Ltd
12. Nepal Bikas Bank Ltd
13. Narayani Industrial and Development Bank Ltd
14. Butwal Spinning Mills
15. Birat Shoe Ltd
16. Fleur Himalayan Ltd
17. Nepal Bitumen and Barrel Uddyog
18. National Hydropower Company Ltd
19. Salt Trading Company Ltd
20. Nepal Welfare Company Ltd
21. National Life Insurance Company Ltd
22. Butwal Finance Ltd
23. Srijana Finance Ltd
24. Imperial Financial Institution Ltd
25. Nirdhan Utthan Bank Ltd

Know Your Bank II

The entry of the 26th commercial bank has jazzed up competition in the domestic banking sector. After the global meltdown, the banking sector is in the spotlight. Though Nepali banks are not affected by the global financial crisis, we need to keep a continuous watch over them and their financial fitness. Lets have a look at some of our banks and their financial health.

6. Himalayan Bank Ltd (January 18, 1993)
Chairman: Manoj Bahadur Shrestha
CEO: Ashoke Rana
Paid up capital: Rs 1,013.50 million
Core capital: Rs 2,744.6 million
Net Profit: Rs 641.3 million (After Tax)
NPA: Rs 475.8 million (2.36 per cent)
Networth: Rs 2,787.81 million
Earning Per Share: Rs 63.28
Price earning Ratio (P/E): 31.29
Branches: 17
ATMs: 29

17. Siddhartha Bank Ltd (December 24, 2002)
Chairman: Chiranji Lal Agrawal
CEO: Surender Bhandari
Paid up capital: Rs 828 million
Core capital: Rs 1,056 million
Net Profit: Rs 143 million
NPA: 1.05 per cent
Networth: Rs 1,075 million
Earning Per Share: Rs 17.29
Price earning Ratio (P/E): 63.04
Branches: 10
ATMs: 3

20. Citizens' International Bank Ltd (April 20, 2007)
Chairman: Dr Shankar Prasad Sharma
CEO: Rajan Singh Bhandari
Paid Up Capital: Rs 700 million
Core Capital: Rs 751.40 million (As of October 16, 2008)
Net Profit: Rs 12.20 million (As of October 16, 2008)
NPA: Nil
Networth: Rs 751.40 million
Earning Per Share: Rs 9.79 (July 16, 2008)
Price Earning Ratio (P/E): Nil
Branches: Nine
ATMs: Nine

21. Prime Commercial Bank (September 24, 2007)
Chairman: Narendra Bajracharya
CEO: Narayan Das Shrestha
Paid up capital: Rs 700 million
Core capital: Rs 771.81 million
Net Profit: Rs 43.80 million
NPA: Nil
Networth: Rs 771.87 million
Earning Per Share: Rs 6.26
Price earning Ratio (P/E): Nil
Branches: six (shortly coming)
ATMs: 4 (shortly opening)

22. Bank of Asia Nepal Ltd (October 12, 2007)
Chairman: Trilok Chand Agrawal
CEO: Parshuram Kunwar Chhetri
Paid up capital: Rs 700 million
Core capital: Rs 704.46 million
Net Profit: Rs 44.62 million
NPA: NilNetworth: Rs 704.46 million
Earning Per Share: Rs 0.64
Price earning Ratio (P/E): Nil
Branches: Seven
ATMs: 0

Insurance is usually considered the concept of bearing risks which ultimately lead to family protection, important adjunct to trade, commerce and industry, loss prevention, contribution to national economy and mobilisation and investment of funds. The development of the insurance sector, however, depends on the growth of other economic sectors and also purchasing capacity of the people.
The trend of insuring vehicles owned by individuals and institutions is increasing by the day. People are getting more aware of the need to insure vehicles they own due to the increasingly risky environment in recent days. Auto insurance is catching up recently as people have become more conscious that insurance can really help during difficulty.
"People like to secure their property when there is involvement of big money, unsecured and small roads and more exposure to accidents due to ineffective rules," said Archana Pathak, deputy business development manager at Shikhar Insurance that insures about 450 vehicles on an average each month.
Growth in auto insurance business stands at over 30 per cent and people are gradually realising the need to insure four-wheelers as well as two-wheelers. The increased trend of buying vehicles on finance has also contributed to auto insurance as insurance is mandatory in finance schemes.
In 2006-07 alone, premium insurance companies collected Rs 834,077,295 on vehicle insurance of their total Rs 2,854,632,365 premium collection.
According to data from Beema Samiti (Insurance Board), of the total growth in insurance sector auto insurance contributed to over 30 per cent in the year 2006-07.
The market for vehicle insurance has increased due to cheaper premium also. "This is because the insurers want to minimise the premium and try to get more when they claim," said Kewal Krishna Shrestha, CEO of Everest Insurance Company.
The insurance for commercial vehicles is even cheaper than that of private ones. A total of 17 non-life insurance companies provide auto insurance to customers currently. Beema Samiti regulates them and issues directives from time to time for their proper functioning.
However, all is not hunkydory. There are problems also pulling the growth down. "Limited market, topographical conditions, insignificant growth, low capital base of insurers, problems in re-insurance, more players, stiff competition and no compulsory motor vehicle insurance are some key factors blocking the growth of auto insurance," said an industry insider.
Competition among insurance agencies has also hit the industry hard. "There is cutthroat competition due to too many players in the small market," said Pathak, adding that some of the companies were violating the market rules with extra discounts like fleet discounts, which are only to be given if more than one vehicle in the same name is insured. "As a result, the customer has to face problems while staking a claim. Low premium exploits customers as they are misguided," she added.
The growing number of vehicles and mandatory provisions from financing institutions to insure vehicles before financing have helped increase auto insurance, according to insurance agents.In comparison to commercial vehicles, fewer private vehicles are insured due to their owners' lack of awareness of benefits of vehicle insurance.
Despite the increase in number of insurance agencies people's interest in insuring private vehicles has not increased accordingly, Pathak said and added, however, that growth was steady. "Auto insurance holds tremendous potential for growth," Shrestha said.
"Insurance premium for both private and commercial vehicles is reasonable," Pathak said adding that calculating parameters are different though. Private vehicles are judged on the basis of insured amount, cubic capacity and age but commercial vehicles are either goods carrying or passenger carrying. "The commercial vehicle thus requires seat capacity/carrying capacity which determines the premium," she added.
Similarly, time period also affects vehicle premium as depreciation decreases the value of the sum insured, which directly determines the insurance premium. Also, when renewal is done the insured amount is adjusted every year with depreciation.Auto insurance rates are tariff rates. All general insurance companies follow the guidelines of the regulator. The rates vary according to the cubic capacity of the vehicle. The value to insure (sum insured of the vehicle) and the age of vehicle also affect the premium to be paid.
"For instance, the break-up with reference to cubic capacity (cc) is below 1000 from 100cc to 1600 cc and above 1600 cc will have different rates," Pathak informed.
One can insure second-hand vehicles also. "Second-hand vehicles are also insured," Pathak said adding that it was just like insuring a first-hand vehicle. "The agency needs a copy of the blue book showing the transfer of ownership. Also, the value of the vehicle might differ due to depreciation," she said.
The there is the problem of people complaining about the lengthy process of insurance claims. "While paying premium customers want to pay less but when they claim they want to get more," grumbled Shrestha.
According to statistics, contribution of the insurance business to the total GDP stands at 1.09 in the year 2005-06 and this contribution is gradually increasing. In the year 2006-07, it is expected to contribute a little above two per cent to the total GDP.

Growth trend of auto insurance in total insurance

2001-02 – 18.15 per cent

2002-03 – 20.34 per cent

2003-04 – 25.54 per cent

2004-05 – 26.61 per cent

2005-06 – 29.22 per cent

(2006-07 – more than 30 per cent expected)

Oil supply for Tihar ensured, NOC in profit

The government of India today directed the Indian Oil Corporation (IOC) - the sole petroleum products’ supplier to Nepal Oil Corporation (NOC) - to supply petroleum product’s smoothly.
The Indian government during the visit of Prime Minister Puspa Kamal Dahal ‘Prachanda’ committed that it would provide a credit of upto Rs 1,500 million Indian Currency (IC) to Nepal for the next three months to ensure uninterrupted petroleum products’ supplies.
“However, we are still waiting to get the duty draw back to the tune of Rs 610 million,” NOC managing director Digamber Jha said.
That apart, NOC is waiting for financial institutions to provide it loans. “The cabinet decided on September 4 to provide NOC Rs 3 billion from various financial institutions for smooth supplies,” said Jha adding that it has, however, got only Rs 1 billion from Citizen Investment Trust (CIT) while other financial institutions were not very keen on lending. NOC also has to get Rs 840 million VAT refund that it overpaid to the Inland Revenue Department.
Meanwhile Nabindra Raj Joshi, Constituent Assembly member, who lobbied for the working capital of NOC during the acute shortage, said the Finance Ministry has asked NOC to audit its last year’s account and then reclaim the overpaid VAT.
“NOC can collect advance from all petroleum dealers,” Joshi suggested. “Since there is no loss at current price, they will happily deposit the advance.” According to the price list sent by IOC yesterday, NOC is in profit of around Rs 10 million. IOC sends price list to NOC on every second and sixteenth day of the english month.
“If NOC ensures that the profit it gets will be deposited directly to banks, any financial institution will be ready to lend NOC,” Joshi said adding that NOC could adjust price as it was in profit but Jha clarified until Tihar NOC was unable to take any decision on price adjustment.
At the current price, the NOC is earning Rs 16.50 per litre petrol and Rs 25 per litre ATF, totalling it to above Rs 10 million profit from October second week.

TeliaSonera bites FDI bait

At a time when the government is urging foreign investors to come and invest in Nepal, TeliaSonera — a mobile communication services provider in Northern Europe and the Eurasian region — has chalked up plans for mega investment in Nepal.
“Well positioned in high growth emerging markets, TeliaSonera is planning a huge investment in Nepal,” TeliaSonera president Tero Kivisaari said and added, “Provided there is a level playing field.”
“Every player should have equal opportunity to compete,” he said, pointing out that competition was good. “Let the consumer choose who is better, or the best.” The result of a merger of the Swedish incumbent Telia AB and Finnish incumbent Sonera Corporation in December 2002, TeliaSonera has net sales of $14.2 billion. TeliaSonera Eurasia, one of its arms, is in the mobile communication business in high growth emerging markets.
Headquartered in Stockholm, it has recently bought the 51 per cent stake from Visor Group — a Kazakh investment and advisory firm — that holds 80 per cent stake in Spice Nepal Pvt Ltd, the provider of Mero Mobile phones in Nepal.
Nepal is in the early phase of introducing mobile technology that has great potential, accordingto Kivisaari. “The current capacity is not sufficient and we are planning to increase the capacity of service,” he said.
Spice Nepal — the second largest mobile operator in Nepal — after the new alliance is expected to bring new strategy to increase geographical coverage. Mobile penetration in Nepal, with a population of 28.4 million, is approximately 13 per cent. “There is a huge potential in this market,” Kivisaari said.
To a query on whether there was a tariff cut in the offing, he replied diplomatically that the company was for providing quality service at affordable rates. Spice Nepal launched its operations in September 2005 and has around 1.6 million subscriptions.
It has an estimated market share of 41 per cent as of August 2008. Net sales of Spice Nepal in 2007 and for the first six months of 2008 were $41.1 million and $34.1 million, respectively. The private cellular mobile telephone service operator, Spice Nepal, with brand name Mero Mobile has a state licence for mobile services in Nepal in GSM 900/1800 and 3G 2.1 GHz. Mero Mobile started its service with voice call and SMS, and in a short period of operations introduced services like voice mail, SMS2e-mail, missed call notification, mobile internet (GPRS/Edge), MMS, PRBT and other value-added services.

Gold soars at weak rupees expense, hits all time high in domestic market

Plan to buy gold ornaments for Tihar. Well, put it in on hold, pronto. The precious yellow metal has become virtually untouchable, thanks to escalating price.
The domestic market on Monday experienced an all-time high as far as the cost of gold is concerned. The market opened at Rs 21,860 per 10 gramme (Rs 25,500 per tola), breaking all previous records.
“This is the highest price of gold in the domestic market. The escalation can be attributed to the ongoing financial crisis in the US,” said Tej Ratna Shakya, president, Nepal Gold and Silver Dealer’s Association (NEGOSIDA).
However, the key reason is the weak rupee against the dollar. The strong dollar against the rupee — a dollar cost over Rs 77 on Monday — and the current global financial meltdown have jacked up the price of the gold in the domestic market. Though the domestic market reacts according to the international price of gold, the price today in the global market is at $856 per ounce, much lesser than in July when it was over $1000.
Incidentally, on July 16, gold had hit its previous high — Rs 25,450 per tola (11.664 gramme), due to record high price in the international market that was over $1000 per ounce.
As if the bear run in the equity markets is not bad enough, the free fall of currencies has only fuelled the worldwide crisis.“The global share market is in the doldrums. No wonder, investors are seeking a cushion in gold,” Shakya added. Crude oil price dropped to $72.67 per barrel — a new low this year. But, it has had little impact on gold.
“The plunge in crude oil price has left gold untouched due to the uncertainty in the global market,” Shakya added. Normally falling crude price brings the gold price down in the international market.
The panic in international banking coupled with instability on credit and foreign exchange fronts has also contributed to it.
The rising price has perturbed the customers. In fact, the daily transaction of gold —estimated above 15 kg last Dashain — has decreased by a whopping 35 per cent this year. “We transacted only 10 kg of gold per day during Dashain. It may drop even more during Tihar,” said the president, NEGOSIDA.

Bullion defies global meltdown
KATHMANDU: As global confidence wanes, will gold be pulled down with other assets? Experts believe once the de-leveraging hemorrhage has abated, investment funds moving into gold will take the reins. Gold will retain value when other assets won’t. A huge number of investors will shift from other markets to it, taking its price much higher.
With money being issued in seeming trillions, gold stands head and shoulders above the rest. It is a limited edition item. It can be traded anywhere in the world. It doesn’t rely on government support, handouts or promises of payment. The gold market is about to enter the final stage of its evolution. This stage springs from failing confidence in paper money, currently as bad as any pre-war situation and heads back into the investment world as an important component of responsible portfolios. If governments can accede to the disciplines that gold imposes on them, they will also start buying gold.
But this is the hardest leap for them because they have been fighting gold off from being relevant to the money world and promoting paper money for nearly 40 years since US president Nixon closed the gold window in 1971. Once they endorse gold by buying it, there will be a flood of funds looking for it. - Agencies

Paul Krugman nets Nobel for Economics

US economist Paul Krugman, a prolific New York Times columnist and fierce critic of Washington’s economic policies, won the Nobel Economics Prize today.

“The Princeton University professor won for his ‘analysis of trade patterns’,” the Nobel jury said.

Krugman, 55, has formulated a new theory that determines effects of free trade and globalisation as well as driving forces behind worldwide urbanisation, the citation said.“I am a great believer of continuing to do work. I hope it doesn’t change things too much,” Krugman said after the announcement.

“Krugman’s approach is based on the premise that many goods and services can be produced more cheaply in long series, a concept generally known as economies of scale,” the jury wrote.Unlike traditional trade theory, which assumes that differences between countries explain why some nations export agricultural products while others export industrial goods, Krugman’s “theory clarifies why worldwide trade is in fact dominated by countries which not only have similar conditions but also trade in similar products,” it added.

His theory shows globalisation tends to increase pressures on urban living, sucking people into centres of concentration.“Krugman’s theories have shown the outcome of these processes can well be that regions become divided into a high-technology urbanised core and a less developed periphery,” the jury said.Ever greater concentration in cities is a major policy issue everywhere but particularly in developing countries, since cities struggle to have infrastructure to cope and urbanisation makes it increasingly difficult to deal with urban environmental pollution.

Last year, US trio Leonid Hurwicz, Eric Maskin and Roger Myerson won for their pioneering work on trading mechanisms aimed at making markets work more efficiently.

Laureates receive a gold medal, a diploma and $1.42 million, which can be split among up to a maximum of three winners per prize.The formal prize ceremonies will be held in Stockholm and Oslo on December 10.

Economics Laureates

•2008: Paul Krugman (US)

•2007: Leonid Hurwicz, Eric Maskin and Roger Myerson (US)

•2006: Edmund S Phelps (US)

•2005: Thomas C Schelling (US), Robert J Aumann (US-Israel)

•2004: Finn Kydland (Norway), Edward Prescott (US)

•2003: Robert F Engle (US), Clive W J Granger (Britain)

•2002: Daniel Kahneman (Israel-US) and Vernon L Smith (US)

•2001: George Akerlof, A Michael Spence, Joseph Stiglitz (US)

•2000: James Heckman (US), Daniel McFadden (US)

•1999: Robert Mundell (Canada)

•1998: Amartya Sen (India)

•1997: Robert Merton (US), Myron Scholes (US)

•1996: James Mirrlees (Britain), William Vickrey (US)

•1995: Robert Lucas Jr (US)

•1994: John Harsanyi, John Nash (US), Reinhard Selten (Germany)

•1993: Robert Fogel, Douglas North (US)

•1992: Gary Becker (US)

•1991: Ronald Coase (Britain)

•1990: Harry Markowitz , Merton Miller, William Sharpe (US)

•1989: Trygve Haavelmo (Norway)

•1988: Maurice Allais (France)

•1987: Robert Solow (US)

•1986: James Buchanan (US)

•1985: Franco Modigliani (US)

•1984: Richard Stone (Britain)

•1983: Gerard Debreu (US)

•1982: George Stigler (US)

•1981: James Tobin (US)

•1980: Lawrence Klein (US)

•1979: Theodore Schultz (US), Arthur Lewis (Britain)

•1978: Herbert Simon (US)

•1977: Bertil Ohlin (Sweden), James Meade (Britain)

•1976: Milton Friedman (US)

•1975: Leonid Kantorovich (Soviet Union), Tjalling Koopmans (US)

•1974: Gunnar Myrdal (Sweden), Friedrich von Hayek (Britain)

•1973: Vassily Leontief (US)

•1972: John Hicks (Britain), Kenneth Arrow (US)

•1971: Simon Kuznets (US)

•1970: Paul Samuelson (US)

•1969: Ragnar Frisch (Norway), Jan Tinbergen (Netherlands). - AFP

Bush baiter with a cause
WASHINGTON: Krugman is known as a virulent critic of president George W Bush through his articles in the New York Times. He is author of dozens of books and several hundred articles, primarily about international trade and global finance and was known as creating ‘new economic geography’. Announcing the award the Nobel Jury said it was for “analysis of trade patterns and location of economic activity” and a theory that determines effects of free trade, globalisation and forces behind global urbanisation.

Born February 28, 1953, in Long Island, New York state, Krugman gained his PhD at the Massachusetts Institute of Technology (MIT) and is currently professor of economics and international affairs at Princeton University. He also taught at Yale University, the London School of Economics, Stanford, and MIT. Among his best-known works are Peddling Prosperity and International Economics: Theory and Policy. He is also known for his bi-weekly columns in The New York Times, in which he often skewers the Bush administration’s foreign and domestic policies. He also writes monthly columns in Fortune Magazine and Slate. He has served on the US Council of Economic Advisers and received the prestigious John Bates Clark medal in 1991. - AFP

Know Your Bank

Amid the global crisis and the US government's decision yesterday to buy an ownership stake in a broad array of American banks for the first time since the Great Depression, it wouldn't be a bad idea to have a thorough look at our own financial institutions and their fitness.

1. Nepal Bank Ltd (November 15, 1937)
Chairman: Bharat Bahadur Karki
Coordinator: Dr Binod Atreya (NRB)
Paid up capital: Rs 380 million
Core capital: N/A
Net Profit: Rs 528.7 million
NPA: 8.05 per cent
Networth: Negative
Earning Per Share: N/A
Price earning Ratio (P/E): N/A
Branches: 99
ATMs: Joined hands with SCT network

2. Rastriya Banijya Bank (January 23, 1966)
Chairman: Dr Bhola Chalise
CEO: Janardan Acharya
Paid up capital: Rs 1.017 billion
Core capital: N/A
Net Profit: Rs 1.77 billion
NPA: 20 per cent
Networth: N/A
Earning Per Share: N/A
Price earning Ratio (P/E): N/A
Branches: 117
ATMs: 8

3. Nabil Bank Ltd (July 16, 1984)
Chairman: Satyendra Pyara Shrestha
CEO: Anil Shah
Paid up capital: Rs 689.2 million
Core capital: Rs 2,363.6 million
Net Profit: Rs 746.5 million
NPA: Rs 161 million of Rs 21,759.4 million loan (0.7 per cent)
Networth: Rs 2,437.2 million
Earning Per Share: Rs 108
Price earning Ratio (P/E): 48.7
Branches: 26
ATMs: 31

5. Standard Chartered Bank Nepal Ltd (January 24, 1986)
Chairman: Neeraj Swaroop
CEO: Sujit Mundul
Paid up capital: Rs 620.78 million
Core capital: Rs 2,304.76 million
Net Profit: Rs 818.92 million
NPA: Rs 128.72 million (0.92 per cent)
Networth: Rs 2,492.55 million
Earning Per Share: Rs 131.92
Price earning Ratio (P/E): 51.77
Branches: 11 branches and four extension counters
ATMs: 17

9. Everest Bank Ltd (October 18, 1994)
Chairman: Bishnu Krishna Shrestha
CEO: R K Ummat
Paid up capital: Rs 831.4 million
Core capital: Rs 2,004.7 million
Net Profit: Rs 450.1 million
NPA: 0.64 per cent
Networth: Rs 1,679.6 million
Earning Per Share: Rs 89.90
Price earning Ratio (P/E): 34.84
Branches: 27
ATMs: 15

10. Bank of Kathmandu Ltd (March 3, 1995)
Chairman: Sanjay Bahadur Shah
MD: Radhesh Pant
Paid up capital: Rs 603.14 million
Core capital: Rs 1,324.51 million
Net Profit: Rs 371.25 million
NPA: 1.76 per cent
Networth: Rs 224.36 million
Earning Per Share: Rs 61.55
Price earning Ratio (P/E): 38.18
Branches: 23 branches and 6 Extension Counters
ATMs: 12 ATMs

11. Nepal Credit and Commerce Bank (October 14, 1996)
Chairman: Prithivi Raj Ligal
CEO: Ratna Raj Bajracharya
Paid Up capital: Rs 1,400 million
Core capital: Rs 646.55 million
Net profit: Rs 495.56 million
NPA: 16.36 per cent
Networth: Rs 696.13 million
Earning Per Share: Rs 35.40
Price earning Ratio (P/E): 12.91
Branches: 17 branches
ATMs: 2 (Baghbazar and Chabahil)

13. NIC Bank Ltd (July 21, 1998)
Chairman: Jagdish Prasad Agrawal
CEO: Sashin Joshi
Paid up capital: Rs 944 million
Core capital: Rs 1,294 million
Net Profit: Rs 243 million
NPA: Rs 98 million (0.85 per cent)
Networth: Rs 1,303 million
Earning Per Share: Rs 25.75
Price earning Ratio (P/E): 49.86
Branches: 16
ATMs: Tie-up with SCT

14. Kumari Bank Ltd (April 3, 2001)
Chairman: Noor Pratap J B Rana
GM: Kapil Sharma
Paid up capital: Rs 1,070 million
Core capital: Rs 1,369.89 million
Net Profit: Rs 180.37 million
NPA: 1.35 per cent
Networth: Rs 1,375.74 million
Earning Per Share: Rs 16.86
Price earning Ratio (P/E): 59.92 times
Branches: 15
ATMs: 15

16. Laxmi Bank Ltd (April 3, 2002)
Chairman: Rajendra K Khetan
CEO: Suman Joshi
Paid up capital: Rs 913.19 million
Core capital: Rs 1,086.01 million
Net Profit: Rs 120.03 million
NPA: 0.13 per cent
Networth: Rs 1,154.16 million
Earning Per Share: Rs 19.68
Price earning Ratio (P/E): 56.56 times
Branches: 14
ATMs: 10

25. NMB Bank Ltd (Established in 1996/Upgraded in 2007)
Chairman: Mahabir Prasad Goyal
CEO: Upendra Poudel
Paid up capital: Rs 1 billion
Core capital: Rs 1,210.391 million
Net Profit: Rs 73.1 million
NPA: 1.52 per cent
Networth: Rs 1,210.91 million
Earning Per Share: Rs 7.31
Price earning Ratio (P/E): 127.20
Branches: 2
ATMs: 1

Issue Managers face hard times

Issue managers will be facing more heat regarding the coming Initial Public Offerings (IPOs), if recent allotments are indications of it.
Last week, NIDC Capital Markets Ltd alloted shares of Global Bank amid high drama. A week prior to that NMB Bank had alloted the shares of Clean Energy Development Bank in more or less similar conditions.
Why are issue managers facing controversy in recent days? Is it because investors are becoming more aware and ready to fight for their rights or Nepal Stock Exchange (Nepse) and issue managers have not managed to make the share allotment more transparent.
"We are not involved in the allotment," Dr Chiranjivi Nepal, chairman of Securities Board of Nepal (Sebon), said adding that issue managers are required to 'only' inform the board and it can allot shares.
A group of investors freaked out, when they came to know that NIDC Capital Market Ltd - the issue manager of Global Bank - allotted shares to six of the 11 'big investors' who had applied for over 0.1 million to 0.2 million-unit of shares - ie, over Rs 10 to 20 million.
On the other hand, only 13,180 of the total 80,369 applicants who applied for 50-unit (eqivalent to Rs 5,000) got the shares.After investors who applied for 50-unit of shares were allotted 20-unit of shares, they flew into a lather. Angered investors held up the allottment programme hostage and forced the issue manager, NIDC Capital Markets and Nepal Stock Exchange to change the module of the allotment.
Finally, the allotment module was changed after reducing the number of 'big investors' to two from six and distributing the remaining shares to the lowest group.
However, the repetition of such controversy has raised serious questions about the possibility of issue managers affecting the IPOs to come.
Global Bank had floated its 3000,000-unit shares with Rs 100 face value each to the public. This is probably the largest IPO among banks in recent days.
The 19th commercial bank, Global, also has the largest number of shareholders now. Though Nepse and Sebon are more active these days, issue managers need to get their act together.


Anamoloies
*On August 10, Nepse suspended the transactions of two brokers - broker no. 5, Market Securities Exchange, and broker no. 8, Ashutosh Brokerage and Securities - for manipulating the rules.
*On August 13, Sebon suspended the licence of Nepal Finance Ltd (Nefisco) and stopped it from operating as a merchant bank due to its alleged 'fraudulent' transaction of promoters' shares.
*On August 24, Sebon suspended Shilpa Securities Pvt Ltd (broker no. 20) until further notice on the charge of providing false information.

Oil plummets to $82 on global slowdown fears

SINGAPORE: Oil prices plummeted to a one-year low below $83 a barrel on Friday in Asia as investor fears of a severe global economic downturn sparked a panicked sell-off of equities and crude. Light, sweet crude for November delivery was down to $82.24 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore, the lowest since October 2007.
"The whole market has lost confidence in everything," said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne. "Everyone is worried about global growth, and oil is the front line commodity for that. There's just a lot of panic and fear in the market."
Investors have been unimpressed by interest rate cuts by the U.S. and other leading central banks this week to help unclog the credit markets and promote lending. A credit crisis that began last year in US sub-prime mortgages has spread across the globe, forcing governments to spend hundreds of billions of dollars to bail out banks, brokerages and insurance companies.
Japan's benchmark Nikkei 225 index plunged more than 10 percent Friday while the Dow Jones industrial average fell more than 7 percent Thursday to its lowest level in five years.
"The problem is no one really knows how far and deep this will go," Pervan said. "But we can see from the size of the rescue packages, this is a really serious deal. This isn't a normal bear market."
Oil investors even ignored signs that the Organization of Petroleum Exporting Countries may cut production. OPEC said on Thursday it will hold an extraordinary meeting on November 18 to discuss how the widening global financial crisis is affecting oil prices.
On Thursday, the head of Libya's national oil company, Shukri Ghanem, called on oil producing nations to cut output.
"OPEC is trying to jaw-bone the price up, but they'll have to come into the market because no one is going to be believe just jaw-boning with the market sliding so quickly," Pervan said. "The market is so demand focused, it doesn't even care what happens to supply."
OPEC's decision last month to cut production by 520,000 barrels a day failed to halt the losses, which have accelerated in recent days.
Oil prices have fallen about 44 percent since soaring to a record $147.27 on July 11.
"We haven't seen the bottom of this yet," Pervan said. "We thought $75 would be a floor but if the market mood doesn't change, $50 to $60 a barrel is not out of the question."
In other Nymex trading, heating oil futures fell 9.46 cents to $2.32 a gallon, while gasoline prices dropped 8.68 cents to $1.94 a gallon. Natural gas for November delivery rose 6.69 cents to $6.69 per 1,000 cubic feet.
In London, November Brent crude fell $3.66 to $79.00 a barrel on the ICE Futures exchange. -- Associated Press

Banks borrow record amount from Fed

WASHINGTON: Banks borrowed in record amounts from the Federal Reserve's emergency lending facility over the past week, while investment banks drew loans at a brisk — though slightly lower — pace, fresh proof of the credit problems gripping the country.
The Fed's report released Thursday said commercial banks averaged a record $75 billion in daily borrowing over the past week. That surpassed the old record — a daily average of $44.5 billion — logged in the previous week. On Wednesday alone, $98 billion was drawn, an all-time high.
For the week ending Wednesday, investment firms drew $134 billion. That was down from a record $147.7 billion in the previous week. This category was broadened last week to include any loans that were made to the U.S. and London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley and Merrill Lynch.
The Fed report also showed that over the last week $145.9 billion worth of loans were made to money market mutual funds — via banks — to help the funds, which have been under pressure as skittish investors demand withdrawals.
Squeezed banks and investment firms are borrowing from the Fed because they can't get money elsewhere. Skittish investors have cut them off, moving their money into safer Treasury securities. Financial institutions are hoarding whatever cash they have, rather than lend it to each other or customers.
The report also showed that the Fed has loaned $70.3 billion to insurance giant American International Group. In mid-September, the Fed said it would provide the troubled company a two-year, $85 billion loan. On Wednesday the central bank said it would loan the company an additional $37.8 billion.
The report comes as Washington policymakers battle the worst financial crisis since the stock market crash of 1929.
Investment houses in March were given similar, emergency-loan privileges as commercial banks after a run on Bear Stearns pushed what was the nation's fifth-largest investment bank to the brink of bankruptcy.
The identities of commercial banks and investment houses that borrow are not released. Commercial banks and investment companies now pay 1.75 percent in interest for the loans.
Since the Bear Stearns debacle in March, the Fed has taken a series of radical, unprecedented steps to get lending — the economy's oxygen — flowing more freely again. It has repeatedly tapped its Depression-era authority to be a lender of last resort not only to financial institutions but also to other types of companies.
Critics worry that the Fed's actions could put billions of taxpayers' dollars at risk.
Separately, as part of efforts to relieve credit strains, the Fed auctioned $37.5 billion in super-safe Treasury securities to investment companies Thursday. Bids were placed for $62.78 billion worth of the securities.
In exchange for the 28-day loans of Treasury securities, bidding companies can put up as collateral more risky investments. These include certain mortgage-backed securities and bonds secured by federally guaranteed student loans.
All the Fed's extraordinary efforts, however, haven't been able to halt the crisis or prevent a seismic shake-up on Wall Street. In recent weeks, Lehman Brothers, the country's fourth-largest investment bank, filed for bankruptcy protection. A weakened Merrill Lynch, deciding it couldn't go it alone anymore, found help in the arms of Bank of America. AIG was thrown a financial lifeline. And, the last two investment houses — Goldman Sachs and Morgan Stanley — decided to convert themselves into commercial banks to better weather the financial storms.
Meanwhile, 13 banks have failed this year, compared with three last year.
Stocks have tumbled, too. The Dow suffered a triple-digit loss for the sixth day in a row Thursday, a first, and the average dropped for the seventh day in a row. The index lost 679 points to close below 9,000 for the first time in over five years. -- Associated Press

Nepal bank Ltd comes of age, signs accord to provide debit cards

Nepali financial institutions are upgrading themselves to keep up with international financial tools and technology.
Nepal Bank Ltd (NBL), the oldest and first commercial bank of Nepal, has joined hands with Smart Choice Technologies (SCT) to upgrade itself technologically and provide services to the customers.
Cut-throat competition and decreasing market share have compelled every financial institutions, especially commercial banks, to upgrade themselves technologically to cater to the needs of customers.
After People's Bank Nepal got licence from Nepal Rastra Bank on September 25, a total of 26 commercial banks are now in operation, crowding the small economy like Nepal and compelling themselves to bring new products and provide more services to the customers.
Dr Binod Atreya, the coordinator of NBL management team and Rabindra Malla, managing director of SCT signed an agreement to expand the services to the NBL customers, according to the SCT.
NBL customers can now use the SCT network to withdraw money from over 165 ATMs and 1,000 Point of Sales (PoS) of SCT throughout the country.
"It can be used in 1000 PoS in India also," SCT said, adding that NBL is the 39th member of the SCT network.Before SCT came into existence in 2004, there were only 22,000 debit cards in circulation but today there are 3,64,780 cards in circulation. Out of a total 12,000 debit card users — in a day, almost half at 6,500 are the SCT cards users only.SCT is also planning to launch bill payment through the SCT cards in near future. It is also thinking of installation of PoS in major revenue generating points like Birgunj and Biratnagar. The Finance Ministry has given approval and its going to be launched any time in future," said Malla.

NBL at a glance
Nepal Bank Ltd (November 15, 1937)
Chairman: Bharat Bahadur Karki
Coordinator: Dr Binod Atreya (NRB)
Paid up capital: Rs 380 million
Core capital: N/A
Net Profit: Rs 528.7 million
NPA: 8.05 per cent
Networth: negative
Earning Per Share: N/A
Price earning Ratio (P/E): N/A
Branches: 99
ATMs: Joined with SCT