Service industry under central bank's scanner

The central bank has asked the travel agencies, tour operators and all the service industry players to report their foreign currency earnings every month regularly.
Nepal Rastra Bank (NRB) has suspected that they are not reporting the foreign currency earnings, though there is a rule of monthly reporting to the central bank. "The agencies also have to deposit foreign currecy in their account within 24 hours," according to the rule.
But the central bank data of service sector income doesnot match the arrival figures giving enough room to suspect foreign currency being not reported.
Tourism entrepreneurs also do not rule out the possibilities.
"Some agencies might not be following the rule," said Uttam Raj Karki, president of Society of Travel and Tour Operators Nepal (SOTTO-Nepal). "Big agencies with a big volumn of business and foreign currency earnings might not be reporting the foreign currency earnings," he said, adding that some of the agencies might be reporting late and taking advantages, but sooner or later they have to report.
The central bank has been seriously concerned with the low foreign currency earnings compared to the rising tourist arrivals.
Earlier also, the agencies were reporting their foreign currency earnings, but the mismatch between the tourist arrivals and foreign currency earnings has forced the central bank to again ask them to report regularly on the monthly basis.
Had the tourist arrivals figure and service sector income matched, the current account would have already been surplus helping to ease Balance of Payment (BoP) deficit.
The current account has registered a deficit of Rs 2.17 billion in the first three months of the current fiscal year hurting the overall BoP to a deficit of Rs 6.88 billion.
"At a time when Nepali economy is suffering from huge informalisation, we are serious to bring the service sector income into formal channel, if it is not coming," the central bank governor Dr Yubraj Khatiwada said.
The country has witnessed a steady growth of tourist arrivals since the begining of 2010. Till November Nepal received 412,446 by air, according to Nepal Tourism Board (NTB).