The World Bank and the government signed agreements today for a combined value of $75 million towards financing the implementation of two projects -- Enhanced Vocational Education and Training Project, and Urban Governance and Development Programme: Emerging Towns Project.
Finance Secretary Krishna Hari Banskota and World Bank Country Director for Nepal Susan Goldmark signed the agreement here today.
Financing for Enhanced Vocational Education and Training project will comprise $20.25 million in grant and $29.75 million in credit, whereas financing for Urban Governance and Development Programme: Emerging Towns Project will comprise $13.75 million in IDA credit and $11.25 million in IDA grant. The credit carries a 0.75 per cent service charge, a 10 year grace period and a maturity of 40 years.
"An inclusive and accessible Technical Education and Vocational Training system can contribute to making Nepali workers more competitive in a globalised market,” said Goldmark. The Enhanced Vocational Education and Training project will help improve access to Technical Education and Vocational Training programmes for disadvantaged youth.
While Nepal has a vibrant workforce, nearly half of the workers have never attended school. The project will help approximately 75,000 Nepali youth get access to short-term skills training, technical education, and opportunities for certifying their existing skills, paying special attention to lagging regions, poor youth, women, and youth belonging to Dalit, Janajati and other marginalised communities, as well as differently abled persons.
Similarly, Urban Governance and Development Programme: Emerging Towns Project will channel municipal grants and provide capital financing for the construction and rehabilitation of socio-economic infrastructure in six participating municipalities – Mechinagar, Dhankuta, Itahari, Lekhnath, Baglung and Tansen.
"Financing will assist municipalities in developing infrastructure that will lead to improved services and greater socio-economic benefits for residents and businesses,” she said, adding that the assistance package signed today will be a blend of credit and grant from the International Development Association (IDA), the World Bank’s concessionary lending arm.
Additional municipalities may be added at a later stage with the expansion of the project. The project will also support institutional development activities in the six municipalities as well as three key central agencies – Ministry of Local Development, Town Development Fund and Department of Urban Development and Building Construction.
The municipal grants will help the participating municipalities achieve immediate service delivery improvements and support community development initiatives while capital financing will address infrastructure backlogs in these municipalities. It will also help develop a rational and transparent system of fiscal transfers to municipalities, as well as for capital financing of urban infrastructure, embedded within the overall intergovernmental fiscal framework.
Thursday, June 30, 2011
Wednesday, June 29, 2011
Bankers seek timely budget to inject liquidity
Due to some financial institutions, public trust declined on all institutions
Bankers asked the government to address the current crisis in the money market through Fiscal Policy and Monetary Policy, apart from building public trust, timely budget and its implementation.
"The current measures of the central bank are short-term measures that have only postponed the crisis, not solved it," said Nepal Bankers Association (NBA) Ashoke Rana.
The central bank has brought measures -- refinancing, twice a week repo, Lender of the Last Resort and interbank lending against good loan -- to address current tight liquidity situation.
However, public trust, timely budget and its implementation, and real estate rollover are key to solution to the current problem, he said, adding that the fluid political situation has declined public confidence on government, let alone on the financial institutions.
"Timely budget implementation and real estate rollover will inject the liquidity in the financial institutions," Rana said.
Due to some financial institutions, public has lost faith on financial system as a whole, he said, adding that not only development banks and finance companies, the commercial banks are also under stress.
Supporting Rana, Nepal Development Bankers' Association president Jhapat Bohara said that the central bank should be pro-active. "The central bank can solve the current problem through Monetary Policy and can suggest the government to address it through budget," he said.
"Some of the institutions went bust due to lack of governance," he said, adding that the development banks headquartered in outside the Kathmandu valley are in comfortable position as they are nor dependent on institutional depositors. "Over dependency on the institutional depositors also invited the current tight liquidity situation," Bohara added.
But the current crisis has taught us a lesson, he said, adding that failure of risk mitigation plan, assets-liability mismatch and lack of vision coupled with plummeting real estate and capital market hit the financial institutions hard where it hurts most tightening the liquidity situation.
He also suggested taking action against those who misused public deposit to restore public confidence on financial institutions.
"Due to some institutions, people lost confidence on overall financial system," said Nepal Finance Company Association president Rajendra Shakya."Since depositors are also under stress, the central bank should show its presence," he said, adding that the whole economy will collapse, if the financial institutions continue to go bust one by one.
Liquidity easing
KATHMANDU: The central bank governor has assured that the tight liquidity situation is easing as deposits with the banks have increased substantially in the last few months. "The latest data with Nepal Rastra Bank (NRB) revealed that commercial banks hold Rs 655 billion as deposit," NRB governor Dr Yubaraj Khatiwada, said adding that in the eleventh month alone deposits have grown by Rs 6 billion. "Along with the commercial banks, deposits of development banks and finance companies also increased by about Rs 10 billion each class," he said, at an interaction programme organised by NRB's Banker Training Center. Governor also assured bankers that there is no crisis in the financial sector and whatever problems existed is heading towards correction. "The inter-bank rates that used to be as high as 12 per cent has come down to about seven per cent demonstrating the increasing liquidity," he said, adding that the growing numbers of crisis-ridden financial institutions should be closed down to make a better financial environment if need be.
Interest rates to go down
KATHMANDU: Good news for the borrowers. Commercial banks are planning to cut the interest rates as they have been observing growth in their deposits in recent weeks. “The borrowers are complaining of high interest rates that increased their cost of production making them loose competitive advantage,” said Nepal Nankers Association (NBA) president and Himalayan Bank CEO Ashoke Rana. He said that the rates might be reduced by one percentage point. Banks have already slashed the deposit rates by 0.5 percentage point for the institutional depositors. The lending rates went up due to high deposit rates in the recent months due to tight liquidity situation. “The central bank also encouraged us to increase deposit rates to attract depositors but the idea did not work,” he said, adding that the depositors want security of their hard earned money not the high interest rates. Due tight liquidity situation, the banks started hiking deposit rates naturally pushing the lending rates too hurting the manufacturing sector.
Bankers asked the government to address the current crisis in the money market through Fiscal Policy and Monetary Policy, apart from building public trust, timely budget and its implementation.
"The current measures of the central bank are short-term measures that have only postponed the crisis, not solved it," said Nepal Bankers Association (NBA) Ashoke Rana.
The central bank has brought measures -- refinancing, twice a week repo, Lender of the Last Resort and interbank lending against good loan -- to address current tight liquidity situation.
However, public trust, timely budget and its implementation, and real estate rollover are key to solution to the current problem, he said, adding that the fluid political situation has declined public confidence on government, let alone on the financial institutions.
"Timely budget implementation and real estate rollover will inject the liquidity in the financial institutions," Rana said.
Due to some financial institutions, public has lost faith on financial system as a whole, he said, adding that not only development banks and finance companies, the commercial banks are also under stress.
Supporting Rana, Nepal Development Bankers' Association president Jhapat Bohara said that the central bank should be pro-active. "The central bank can solve the current problem through Monetary Policy and can suggest the government to address it through budget," he said.
"Some of the institutions went bust due to lack of governance," he said, adding that the development banks headquartered in outside the Kathmandu valley are in comfortable position as they are nor dependent on institutional depositors. "Over dependency on the institutional depositors also invited the current tight liquidity situation," Bohara added.
But the current crisis has taught us a lesson, he said, adding that failure of risk mitigation plan, assets-liability mismatch and lack of vision coupled with plummeting real estate and capital market hit the financial institutions hard where it hurts most tightening the liquidity situation.
He also suggested taking action against those who misused public deposit to restore public confidence on financial institutions.
"Due to some institutions, people lost confidence on overall financial system," said Nepal Finance Company Association president Rajendra Shakya."Since depositors are also under stress, the central bank should show its presence," he said, adding that the whole economy will collapse, if the financial institutions continue to go bust one by one.
Liquidity easing
KATHMANDU: The central bank governor has assured that the tight liquidity situation is easing as deposits with the banks have increased substantially in the last few months. "The latest data with Nepal Rastra Bank (NRB) revealed that commercial banks hold Rs 655 billion as deposit," NRB governor Dr Yubaraj Khatiwada, said adding that in the eleventh month alone deposits have grown by Rs 6 billion. "Along with the commercial banks, deposits of development banks and finance companies also increased by about Rs 10 billion each class," he said, at an interaction programme organised by NRB's Banker Training Center. Governor also assured bankers that there is no crisis in the financial sector and whatever problems existed is heading towards correction. "The inter-bank rates that used to be as high as 12 per cent has come down to about seven per cent demonstrating the increasing liquidity," he said, adding that the growing numbers of crisis-ridden financial institutions should be closed down to make a better financial environment if need be.
Interest rates to go down
KATHMANDU: Good news for the borrowers. Commercial banks are planning to cut the interest rates as they have been observing growth in their deposits in recent weeks. “The borrowers are complaining of high interest rates that increased their cost of production making them loose competitive advantage,” said Nepal Nankers Association (NBA) president and Himalayan Bank CEO Ashoke Rana. He said that the rates might be reduced by one percentage point. Banks have already slashed the deposit rates by 0.5 percentage point for the institutional depositors. The lending rates went up due to high deposit rates in the recent months due to tight liquidity situation. “The central bank also encouraged us to increase deposit rates to attract depositors but the idea did not work,” he said, adding that the depositors want security of their hard earned money not the high interest rates. Due tight liquidity situation, the banks started hiking deposit rates naturally pushing the lending rates too hurting the manufacturing sector.
Pan-African meet aims at revitalising cotton sector
Market conditions are ripe for a resurgence in African cotton farming – recent global prices are more than double their average for the last 20 years.
And prospects for sustained demand appear good as a number of developing country economies, as a byproduct of continuing growth, search for greater supplies of cotton and textiles. Experts and African government officials and their development partners are meeting in Benin this week to decide on joint efforts to overcome obstacles blocking the way to expanded cotton production. The intent is to win greater profits for African farmers and broader and more long-lasting benefits for African economies.
The experts and government officials say steps must be taken to increase yields, since these lag behind global averages, and to provide financing so that farmers and domestic marketers can be more efficient and competitive. They also say concerted efforts should be made to ensure more domestic processing of raw cotton into finished products so that more jobs are created for Africans – and so that the higher wages and economic stability associated with manufacturing can devolve to Africans rather than to firms and economies overseas.
The outcome of June 27–29 Pan-African Cotton Meeting 2011 is intended to be a 'road map' for accomplishing those goals along with a more detailed action plan. The meeting is organized by UNCTAD in collaboration with a series of agencies concerned with African farming: the Comprehensive Africa Agriculture Development Programme (CAADP) of the coordinating agency for the New Partnership for Africa’s Development (NEPAD), the Steering Committee of the European Union-Africa Partnership on Cotton (COS-Cotton), the Secretariat of the African Caribbean, the Pacific Group of States, and the Common Fund for Commodities (CFC).
Sponsors include, most notably, the Government of Benin, and also the CFC, the European Union, and the Centre for the Development of Enterprise (CDE). Attending are representatives of regional economic communities, governments, producer organisations, national industries, international buyers of cotton, and development experts from international organisations. Pascal Iréné Koupaki, Prime Minister of Benin, opened the three-day conference by citing the important role cotton plays in Benin’s economy and in other economies of the region, terming it not only a vital source of revenue but also critical for employment.
Setting the broad outlines of a road map for transforming the growth and marketing of African cotton will be vital for attracting investment in the sector, he said. The Prime Minister added that he hopes international financial and technical partners will help in implementing the road map. UNCTAD Secretary-General Supachai Panitchpakdi said several trends need to be reversed.
While global cotton lint yields have increased from about 500 kg per hectare in the mid-1980s to 700 kg per hectare on average today, in Africa yields have fallen from 400 to 300 kg per hectare, he said. In addition, 'value added' activities in relation to cotton – that is, processing of raw cotton and its manufacture into such products as textiles and clothing – has remained stable for several decades or even has decreased in Africa, while value added activities in Asia have skyrocketed. For example, the volume of cotton yarn produced in Asia has almost quadrupled in the last 20 years, while its production in Africa has fallen by half.
Supachai said the cotton sector “requires appropriate institutions, investment, and the adoption of better technologies”. The Secretary-General also told the meeting that South-South trade – that is, growing trade between developing countries led by such economic giants as China and India – “provides an important opportunity”. The 'road map' coming out of the Pan-African Cotton meeting is intended to focus on the three priorities of increasing productivity, improving marketing, and increasing value addition.
Twenty-seven of Africa ’s 53 countries produce cotton. Twenty are least developed countries (LDCs). It is estimated that the cotton sector employs directly or indirectly 15 million people in the West and Central African subregion, where the commodity is most intensively grown. In this subregion, a number of nations depend on cotton for 30 to 60 per cent of their export revenues. After reaching a peak in 2001 and 2002, when African countries ranked second in global cotton exports, production has been falling.
In 2007–2008, Africa accounted for 5.6 per cent of world cotton production. Low prices – for which subsidies paid by some developed and developing country governments to their domestic producers are sometimes blamed – made it difficult for comparatively inefficient African producers to earn profits. As a result, less cotton has been grown in recent years. Farmers in the 'Cotton 4' countries -- Benin, Burkina Faso, Mali and Chad -- abandoned the sector to such an extent that its production has fallen by half from its 2001–2002 peak.
Declining African production has had the cascading effect of increasing operating costs for Africa-based cotton marketers and manufacturers.
The result, experts at the meeting said, has been heavy losses and increased dependence on government support in a region where millions of livelihoods are connected with cotton farming. Recently, however, the situation has turned.
Cotton prices a year ago averaged about 90 cents a pound – significantly above the average of preceding years – and then climbed as high as 200 cents a pound in February. In May, prices averaged 160 cents per pound, more than double the average price of the last 20 years.
And prospects for sustained demand appear good as a number of developing country economies, as a byproduct of continuing growth, search for greater supplies of cotton and textiles. Experts and African government officials and their development partners are meeting in Benin this week to decide on joint efforts to overcome obstacles blocking the way to expanded cotton production. The intent is to win greater profits for African farmers and broader and more long-lasting benefits for African economies.
The experts and government officials say steps must be taken to increase yields, since these lag behind global averages, and to provide financing so that farmers and domestic marketers can be more efficient and competitive. They also say concerted efforts should be made to ensure more domestic processing of raw cotton into finished products so that more jobs are created for Africans – and so that the higher wages and economic stability associated with manufacturing can devolve to Africans rather than to firms and economies overseas.
The outcome of June 27–29 Pan-African Cotton Meeting 2011 is intended to be a 'road map' for accomplishing those goals along with a more detailed action plan. The meeting is organized by UNCTAD in collaboration with a series of agencies concerned with African farming: the Comprehensive Africa Agriculture Development Programme (CAADP) of the coordinating agency for the New Partnership for Africa’s Development (NEPAD), the Steering Committee of the European Union-Africa Partnership on Cotton (COS-Cotton), the Secretariat of the African Caribbean, the Pacific Group of States, and the Common Fund for Commodities (CFC).
Sponsors include, most notably, the Government of Benin, and also the CFC, the European Union, and the Centre for the Development of Enterprise (CDE). Attending are representatives of regional economic communities, governments, producer organisations, national industries, international buyers of cotton, and development experts from international organisations. Pascal Iréné Koupaki, Prime Minister of Benin, opened the three-day conference by citing the important role cotton plays in Benin’s economy and in other economies of the region, terming it not only a vital source of revenue but also critical for employment.
Setting the broad outlines of a road map for transforming the growth and marketing of African cotton will be vital for attracting investment in the sector, he said. The Prime Minister added that he hopes international financial and technical partners will help in implementing the road map. UNCTAD Secretary-General Supachai Panitchpakdi said several trends need to be reversed.
While global cotton lint yields have increased from about 500 kg per hectare in the mid-1980s to 700 kg per hectare on average today, in Africa yields have fallen from 400 to 300 kg per hectare, he said. In addition, 'value added' activities in relation to cotton – that is, processing of raw cotton and its manufacture into such products as textiles and clothing – has remained stable for several decades or even has decreased in Africa, while value added activities in Asia have skyrocketed. For example, the volume of cotton yarn produced in Asia has almost quadrupled in the last 20 years, while its production in Africa has fallen by half.
Supachai said the cotton sector “requires appropriate institutions, investment, and the adoption of better technologies”. The Secretary-General also told the meeting that South-South trade – that is, growing trade between developing countries led by such economic giants as China and India – “provides an important opportunity”. The 'road map' coming out of the Pan-African Cotton meeting is intended to focus on the three priorities of increasing productivity, improving marketing, and increasing value addition.
Twenty-seven of Africa ’s 53 countries produce cotton. Twenty are least developed countries (LDCs). It is estimated that the cotton sector employs directly or indirectly 15 million people in the West and Central African subregion, where the commodity is most intensively grown. In this subregion, a number of nations depend on cotton for 30 to 60 per cent of their export revenues. After reaching a peak in 2001 and 2002, when African countries ranked second in global cotton exports, production has been falling.
In 2007–2008, Africa accounted for 5.6 per cent of world cotton production. Low prices – for which subsidies paid by some developed and developing country governments to their domestic producers are sometimes blamed – made it difficult for comparatively inefficient African producers to earn profits. As a result, less cotton has been grown in recent years. Farmers in the 'Cotton 4' countries -- Benin, Burkina Faso, Mali and Chad -- abandoned the sector to such an extent that its production has fallen by half from its 2001–2002 peak.
Declining African production has had the cascading effect of increasing operating costs for Africa-based cotton marketers and manufacturers.
The result, experts at the meeting said, has been heavy losses and increased dependence on government support in a region where millions of livelihoods are connected with cotton farming. Recently, however, the situation has turned.
Cotton prices a year ago averaged about 90 cents a pound – significantly above the average of preceding years – and then climbed as high as 200 cents a pound in February. In May, prices averaged 160 cents per pound, more than double the average price of the last 20 years.
Tuesday, June 28, 2011
US business team eager to invest in Nepal
The visiting delegation of American Chamber of Commerce in India (ACCI) has shown interest in investing on infrastructure, IT, food, beverage (Coca Cola), health related equipments, agro products and agro industries.
Briefing the press meet here today, ACCI vice-chairman Aniruddha Lahiri said that they are very much excited about bringing investment in Nepal.
However, they have shown concern on UCPN-Maoist Economic Policy and security of their investment. "We have talked to UCPN-Maoist leaders today," he said, adding that they are eager to support the foreign direct investment (FDI).
Earlier, in the afternoon, they held meeting with UCPN-Maoist supremo Puspa Kamal Dahal 'Prachanda' and chief Maoist ideologue Dr Baburam Bhattarai.
"Our party knows the importance of foreign investment as Nepal needs more investment at the current moment," said Bhattarai coming out of the meeting, though Dahal did not speak to the media.
However, the delegation wanted to know more on UCPN-Maoist Economic Policy and investment security in the wake of growing threat to an Indian company GMR, which was barred from working by the Maoist cadres.
The governments might come and go but the policy stability is a key, the delegation said.
The nine-member team led by Lahiri, along with the US ambassador to Nepal Scott H DeLisi also made a courtesy call to Prime Minister Jhala Nath Khanal at his office today.
Welcoming the delegation, the premier explained that Nepal has great potentials for development and business opportunities are abundant.
"Nepal is moving towards peace and stability," he said, adding that the country is looking forward to an economic revolution and eager to welcome investment from all including members of American Chamber of Commerce.
The Prime Minister assured the team on policy of welcoming foreign investment and providing security to foreign invested enterprises in Nepal as the country's unanimous policy of the current coalition government.
After the premier's assurance, the visitors said that they feel reassured by the PM’s statement on industrial security in Nepal. They also informed that Coca Cola company is planning to double its present investment in Nepal, provided the investment security.
The ambassador, on the occasion, said that US government wants to be partner in Nepal’s efforts for the establishment of peace, prosperity and development in the country.
He also hoped that efforts will be geared towards economic development.
Apart from the premier, the delegation held meeting with finance minister, former finance ministers, and private sector to seek their views on investment protection and explore possible sectors for investment in Nepal.
Earlier the delegation from the American Chamber of Commerce in India had arrived in Kathmandu yesterday for a three-day visit.
The trade mission -- the first by a US business organisation in 13 years --demonstrated the renewed American interest in Nepal’s economy building on the recently-signed US-Nepal Trade and Investment Framework Agreement (TIFA).
Briefing the press meet here today, ACCI vice-chairman Aniruddha Lahiri said that they are very much excited about bringing investment in Nepal.
However, they have shown concern on UCPN-Maoist Economic Policy and security of their investment. "We have talked to UCPN-Maoist leaders today," he said, adding that they are eager to support the foreign direct investment (FDI).
Earlier, in the afternoon, they held meeting with UCPN-Maoist supremo Puspa Kamal Dahal 'Prachanda' and chief Maoist ideologue Dr Baburam Bhattarai.
"Our party knows the importance of foreign investment as Nepal needs more investment at the current moment," said Bhattarai coming out of the meeting, though Dahal did not speak to the media.
However, the delegation wanted to know more on UCPN-Maoist Economic Policy and investment security in the wake of growing threat to an Indian company GMR, which was barred from working by the Maoist cadres.
The governments might come and go but the policy stability is a key, the delegation said.
The nine-member team led by Lahiri, along with the US ambassador to Nepal Scott H DeLisi also made a courtesy call to Prime Minister Jhala Nath Khanal at his office today.
Welcoming the delegation, the premier explained that Nepal has great potentials for development and business opportunities are abundant.
"Nepal is moving towards peace and stability," he said, adding that the country is looking forward to an economic revolution and eager to welcome investment from all including members of American Chamber of Commerce.
The Prime Minister assured the team on policy of welcoming foreign investment and providing security to foreign invested enterprises in Nepal as the country's unanimous policy of the current coalition government.
After the premier's assurance, the visitors said that they feel reassured by the PM’s statement on industrial security in Nepal. They also informed that Coca Cola company is planning to double its present investment in Nepal, provided the investment security.
The ambassador, on the occasion, said that US government wants to be partner in Nepal’s efforts for the establishment of peace, prosperity and development in the country.
He also hoped that efforts will be geared towards economic development.
Apart from the premier, the delegation held meeting with finance minister, former finance ministers, and private sector to seek their views on investment protection and explore possible sectors for investment in Nepal.
Earlier the delegation from the American Chamber of Commerce in India had arrived in Kathmandu yesterday for a three-day visit.
The trade mission -- the first by a US business organisation in 13 years --demonstrated the renewed American interest in Nepal’s economy building on the recently-signed US-Nepal Trade and Investment Framework Agreement (TIFA).
Monday, June 27, 2011
Central bank brings another rescue package
The central bank today opened the fifth window for the cash-strapped banks and financial institutions to avert systemic crisis and keep the faith of public intact on the financial system.
“We have opened a new window for the cash-strapped banks and financial institutions today to help them out,” central bank spokesperson Bhaskarmani Gyawali said, adding that the financial institutions can now borrow from another financial institutions against their good loan or the collateral (loan) accepted by the lender.
This new provision of interbank lending could be for maximum of six months and by the end of next fiscal year, they have to clear such transactions,” he added. “However, interest rates will be according to market rate fixed among themselves.”
Such inter bank borrowing could not be further lent and have to be used to pay the depositors only. “They cannot lend anymore,” Gyawali said.
Though the central bank had opened the special refinancing window — as a fourth measure — it would be issued only after the central bank went through the financial company’s books and assured of its good governance.
“The new window is expected to ease tight liquidity situation in the financial institutions,” Nepal Finance Company’s Association president Rabindra Shakya, said, adding that the financial institutions can help each other out. “Mistrust among the financial institutions is yet another reason that has exposed the current situation,” he added. “Those with excess liquidity can help others out.”
The financial institutions have been showing lower level of Non-Performing Loans (NPL) due to central bank’s directives but they have over exposure on real estate and lands, according to bankers.
“There is no problem in overall financial system but some financial institutions are facing liquidity problem due to their over exposure in the real estate and land,” Gyawali said, adding that the central bank is ready to help out financial institutions that are in trouble but they have to maintain good governance and shun fraudulent activities,” he said, adding that they have to manage the liquidity situation as the central bank has now opened five windows to help them out.
“If they cannot manage liquidity after central banks’ efforts, the central bank will have to take strict action against them like auctioning their lands and assets and pay the depositors,” he said, assuring the depositors not to be worried as their deposit is insured and central bank is ready to take care of their hard earned money.
NRB measures to ease liquidity crunch
1. Refinance to productive sector
2. Special refinancing window
3. Twice a week repo
4. Lender of the Last Resort
5. Relaxation in interbank lending.
Another finance company goes bust
KATHMANDU: World Merchant Bank and Finance Company on Monday tried to escape the withdrawal as it has been facing cash shortage to pay for its depositors since last couple of days. The finance company has on Monday asked for Special Refinancing Facility with the central bank. "If the finance company has been cheating the depositors, the central bank will take action against World Merchant Bank and Finance Company," said central bank spokesperson Bhaskarmani Gyawali. "No banks and financial institutions can refuse withdrawal in any excuse," he said. World Merchant Bank and Finance Company has been saying that it has not closed the transactions but has some liquidity problem that it would solve.
CIB nabs Khadka
KATHMANDU: Central Investigation Bureau (CIB) under Nepal Police on Monday arrested promoter of Capital Merchant Banking and Finance Amir Jung Khadka (28) resident of Baneshwor, on charge of Banking Offence Act. Fugitive Khadka, resident of Baneshwor is sent to Metropolitan Police Range for further action against him. Based in Battisputali Capital Marchant Banking and Finance has also been facing tight liquidity situation since last couple of weeks leading to a huge withdrawal, though it has not closed its transactions.
“We have opened a new window for the cash-strapped banks and financial institutions today to help them out,” central bank spokesperson Bhaskarmani Gyawali said, adding that the financial institutions can now borrow from another financial institutions against their good loan or the collateral (loan) accepted by the lender.
This new provision of interbank lending could be for maximum of six months and by the end of next fiscal year, they have to clear such transactions,” he added. “However, interest rates will be according to market rate fixed among themselves.”
Such inter bank borrowing could not be further lent and have to be used to pay the depositors only. “They cannot lend anymore,” Gyawali said.
Though the central bank had opened the special refinancing window — as a fourth measure — it would be issued only after the central bank went through the financial company’s books and assured of its good governance.
“The new window is expected to ease tight liquidity situation in the financial institutions,” Nepal Finance Company’s Association president Rabindra Shakya, said, adding that the financial institutions can help each other out. “Mistrust among the financial institutions is yet another reason that has exposed the current situation,” he added. “Those with excess liquidity can help others out.”
The financial institutions have been showing lower level of Non-Performing Loans (NPL) due to central bank’s directives but they have over exposure on real estate and lands, according to bankers.
“There is no problem in overall financial system but some financial institutions are facing liquidity problem due to their over exposure in the real estate and land,” Gyawali said, adding that the central bank is ready to help out financial institutions that are in trouble but they have to maintain good governance and shun fraudulent activities,” he said, adding that they have to manage the liquidity situation as the central bank has now opened five windows to help them out.
“If they cannot manage liquidity after central banks’ efforts, the central bank will have to take strict action against them like auctioning their lands and assets and pay the depositors,” he said, assuring the depositors not to be worried as their deposit is insured and central bank is ready to take care of their hard earned money.
NRB measures to ease liquidity crunch
1. Refinance to productive sector
2. Special refinancing window
3. Twice a week repo
4. Lender of the Last Resort
5. Relaxation in interbank lending.
Another finance company goes bust
KATHMANDU: World Merchant Bank and Finance Company on Monday tried to escape the withdrawal as it has been facing cash shortage to pay for its depositors since last couple of days. The finance company has on Monday asked for Special Refinancing Facility with the central bank. "If the finance company has been cheating the depositors, the central bank will take action against World Merchant Bank and Finance Company," said central bank spokesperson Bhaskarmani Gyawali. "No banks and financial institutions can refuse withdrawal in any excuse," he said. World Merchant Bank and Finance Company has been saying that it has not closed the transactions but has some liquidity problem that it would solve.
CIB nabs Khadka
KATHMANDU: Central Investigation Bureau (CIB) under Nepal Police on Monday arrested promoter of Capital Merchant Banking and Finance Amir Jung Khadka (28) resident of Baneshwor, on charge of Banking Offence Act. Fugitive Khadka, resident of Baneshwor is sent to Metropolitan Police Range for further action against him. Based in Battisputali Capital Marchant Banking and Finance has also been facing tight liquidity situation since last couple of weeks leading to a huge withdrawal, though it has not closed its transactions.
US business team in Nepal looking for investment opportunity
A delegation from the American Chamber of Commerce in India has arrived in Kathmandu for a three-day long visit. The trade mission — the first by a US business organisation in 13 years — will explore investment and trade opportunities in Nepal. The important visit demonstrates the renewed American interest in Nepal’s economy building on the recently-signed US-Nepal Trade and Investment Framework Agreement (TIFA), according to the US embassy.
The Embassy hopes to expand the economic ties between the United States and Nepal by inviting more investment to Nepal.
The delegation of nine US companies including Johnson & Johnson, GE Healthcare, Rockwell Automation, Monsanto, and Bell Helicopter will meet the Prime Minister Jhala Nath Khanal, senior government officials, UCPN-Maoist leaders — Puspa Kamal Dahal ‘Prachanda’, Dr Baburam Bhattarai and Mohan Vaidhya ‘Kiran’ alongwith other political leaders, private sector players, tomorrow.
The Embassy hopes to expand the economic ties between the United States and Nepal by inviting more investment to Nepal.
The delegation of nine US companies including Johnson & Johnson, GE Healthcare, Rockwell Automation, Monsanto, and Bell Helicopter will meet the Prime Minister Jhala Nath Khanal, senior government officials, UCPN-Maoist leaders — Puspa Kamal Dahal ‘Prachanda’, Dr Baburam Bhattarai and Mohan Vaidhya ‘Kiran’ alongwith other political leaders, private sector players, tomorrow.
World Bank lends Nepal $41 million
The World Bank and government signed agreements today for a combined value of $41 million towards financing the implementation of two projects -- Kabeli Transmission Project and Strengthening Regional Cooperation for Wildlife Protection in Asia Project.
Finance Secretary Krishna Hari Banskota and World Bank Country Director for Nepal Susan Goldmark signed the agreement here today.
The assistance package signed today will be a blend of credit and grant from the International Development Association (IDA), the World Bank’s concessionary lending arm. Financing for the Kabeli Transmission Project will comprise $27.4 million in IDA credit and $10.6 million in IDA grant. Financing for the Strengthening Regional Cooperation for Wildlife Protection in Asia Project will comprise $3 million in grant.
The credit carries a 0.75 per cent service charge with a 10 year grace period and a maturity of 40 years. The Kabeli Transmission Project, identified as a priority in the government''s Electricity Management Plan formulated in response to the dramatic worsening of electricity supply which took place in 2008, will construct a 132 kV transmission line that will extend from Kabeli Bazaar in the north of Panchthar district to Damak in Jhapa district, both in eastern Nepal. Substations will be constructed in the vicinity of Kabeli Bazaar and at the towns of Phidim, Ilam and Damak.
The project’s location is significant from the perspective of the strategic development of the Integrated Nepal Power System as it will open up the extreme east of Nepal for power sector development and will shorten the distance required to transmit electricity to the country’s main industrial center around Biratnagar.
"The transmission line will facilitate efforts by Nepali private hydropower developers to arrange financing for their projects, as generation projects must have a credible plan for transmitting power before commercial banks will offer financing," Goldmark said, adding that in the medium term, the new transmission line could bring as much as 100 MW into the system.
Similarly, Strengthening Regional Cooperation for Wildlife Protection in Asia is a regional project that will address the cross-border illegal wildlife trade through regional cooperation and capacity building and support Nepal’s initiatives at habitat protection and management for wildlife in general and tigers in particular.
South Asia is home to 13 per cent to 15 per cent of the world's biodiversity and hosts some of the most endangered species on Earth. However, pressures like deforestation, habitat loss, pollution, and poaching of wild animals have put the environmental and ecological balance under severe threat.Bangladesh, Nepal and Bhutan are joining the project at this stage, the bank said, adding that participation by other ‘Tiger Range Countries' (TRCs) in South Asia and South East Asia is envisaged in later phases.
"No single country can manage or eliminate the threats of poaching and the illegal wildlife trade on its own," she said, adding that adopting and implementing a regional approach will be the most appropriate solution to ensure the effectiveness of interventions addressing illegal wildlife trade, habitat management and conservation of species.
Finance Secretary Krishna Hari Banskota and World Bank Country Director for Nepal Susan Goldmark signed the agreement here today.
The assistance package signed today will be a blend of credit and grant from the International Development Association (IDA), the World Bank’s concessionary lending arm. Financing for the Kabeli Transmission Project will comprise $27.4 million in IDA credit and $10.6 million in IDA grant. Financing for the Strengthening Regional Cooperation for Wildlife Protection in Asia Project will comprise $3 million in grant.
The credit carries a 0.75 per cent service charge with a 10 year grace period and a maturity of 40 years. The Kabeli Transmission Project, identified as a priority in the government''s Electricity Management Plan formulated in response to the dramatic worsening of electricity supply which took place in 2008, will construct a 132 kV transmission line that will extend from Kabeli Bazaar in the north of Panchthar district to Damak in Jhapa district, both in eastern Nepal. Substations will be constructed in the vicinity of Kabeli Bazaar and at the towns of Phidim, Ilam and Damak.
The project’s location is significant from the perspective of the strategic development of the Integrated Nepal Power System as it will open up the extreme east of Nepal for power sector development and will shorten the distance required to transmit electricity to the country’s main industrial center around Biratnagar.
"The transmission line will facilitate efforts by Nepali private hydropower developers to arrange financing for their projects, as generation projects must have a credible plan for transmitting power before commercial banks will offer financing," Goldmark said, adding that in the medium term, the new transmission line could bring as much as 100 MW into the system.
Similarly, Strengthening Regional Cooperation for Wildlife Protection in Asia is a regional project that will address the cross-border illegal wildlife trade through regional cooperation and capacity building and support Nepal’s initiatives at habitat protection and management for wildlife in general and tigers in particular.
South Asia is home to 13 per cent to 15 per cent of the world's biodiversity and hosts some of the most endangered species on Earth. However, pressures like deforestation, habitat loss, pollution, and poaching of wild animals have put the environmental and ecological balance under severe threat.Bangladesh, Nepal and Bhutan are joining the project at this stage, the bank said, adding that participation by other ‘Tiger Range Countries' (TRCs) in South Asia and South East Asia is envisaged in later phases.
"No single country can manage or eliminate the threats of poaching and the illegal wildlife trade on its own," she said, adding that adopting and implementing a regional approach will be the most appropriate solution to ensure the effectiveness of interventions addressing illegal wildlife trade, habitat management and conservation of species.
ADB, African Development Bank to set up Trade Finance Programme for Africa
The Asian Development Bank (ADB) and the African Development Bank (AfDB) signed an agreement to help AfDB set up a trade finance programme to boost African trade and, more broadly, South-South trade.
AfDB is scaling up its trade finance activities to channel critical trade support to companies across the African continent, much as the ADB’s programme has done in developing Asia.
Companies in developing countries have difficulties in getting the trade finance they need from banks in order to buy key components from overseas or to sell their goods to other countries.
This prevents them from participating fully in global trade which grew by 14.5 per cent in 2010, its fastest annual pace on record.
ADB’s Trade Finance Programme provides guarantees and loans in support of trade in developing Asia through over 200 partner banks. Under the just-signed Memorandum of Understanding, ADB will share all legal document templates, operation manuals, information technology, and know-how related to its Trade Finance Program with AfDB.
ADB and AfDB expect cooperation to grow in the future, including sharing access to their programs to link banks in both regions. ADB already has such an agreement with the Inter-American Development Bank.
"Partnerships are key to promoting economic growth, and using the Trade Finance Programme framework developed by ADB will help AfDB to achieve in Africa the success ADB has achieved in Asia, but much faster and at a fraction of the start-up cost," said Philip Erquiaga, director general of ADB’s Private Sector Operations Department which oversees the Trade Finance Programme. “In time, we would expect the relationships between developing Africa and developing Asia to expand, resulting in much greater South-South trade which could help ease global economic imbalances.
”By transferring all tools and knowledge of the Trade Finance Program, the two development banks will reduce duplication of effort and cost and will share best practices, as encouraged under the 2005 Paris Declaration on Aid Effectiveness and the framework to achieve the Millennium Development Goals.
Speaking at a ceremony in Tunis to mark the handover of documents, director of AfDB’s Private Sector Department Tim Turner underscored the importance of trade finance in Africa. "By scaling up its trade finance activities, the African Development Bank is supporting an important growth-enabling activity, which has been affected by the recent global financial crisis," he said.
"By leveraging the experience of strategic partners, such as ADB, AfDB will not only be reducing the financial commitment necessary to ramp up its activities but also facilitate the expansion of African trade with Asia."
ADB’s Trade Finance Programme provided support for $2.8 billion worth of trade in 2010, up from $1.9 billion in 2009. It focuses on countries where trade finance is less readily available. As such, the program does not assume any risk in the People’s Republic of China, India, Republic of Korea, Malaysia or Thailand. The five most active users of the programme last year were banks in Bangladesh, Viet Nam, Pakistan, Sri Lanka and Nepal.
The programme also aims to support smaller firms that typically have more trouble accessing trade finance and to promote trade between developing countries. Around 270 of the 783 deals supported by the programme last year involved small and medium-sized enterprises, while half were conducted between two developing Asian economies.In 2009, AfDB’s Board of Directors approved the Bank’s Trade Finance Initiative (TFI) to provide up to $1 billion of support to African commercial banks and other financial institutions to reinvigorate their trade finance operations. Under the TFI, the Bank initially allocated $500 million for short-term trade finance lines of credit (TF LOC) and $500 million for the Global Trade Liquidity Programme (GTLP) in cooperation with the International Finance Corporation (IFC).
The overarching objective of the African Development Bank Group is to spur sustainable economic development and social progress in its regional member countries (RMCs), thus contributing to poverty reduction. The Bank Group achieves this objective by mobilising and allocating resources for investment in RMCs and providing policy advice and technical assistance to support development efforts.
AfDB is scaling up its trade finance activities to channel critical trade support to companies across the African continent, much as the ADB’s programme has done in developing Asia.
Companies in developing countries have difficulties in getting the trade finance they need from banks in order to buy key components from overseas or to sell their goods to other countries.
This prevents them from participating fully in global trade which grew by 14.5 per cent in 2010, its fastest annual pace on record.
ADB’s Trade Finance Programme provides guarantees and loans in support of trade in developing Asia through over 200 partner banks. Under the just-signed Memorandum of Understanding, ADB will share all legal document templates, operation manuals, information technology, and know-how related to its Trade Finance Program with AfDB.
ADB and AfDB expect cooperation to grow in the future, including sharing access to their programs to link banks in both regions. ADB already has such an agreement with the Inter-American Development Bank.
"Partnerships are key to promoting economic growth, and using the Trade Finance Programme framework developed by ADB will help AfDB to achieve in Africa the success ADB has achieved in Asia, but much faster and at a fraction of the start-up cost," said Philip Erquiaga, director general of ADB’s Private Sector Operations Department which oversees the Trade Finance Programme. “In time, we would expect the relationships between developing Africa and developing Asia to expand, resulting in much greater South-South trade which could help ease global economic imbalances.
”By transferring all tools and knowledge of the Trade Finance Program, the two development banks will reduce duplication of effort and cost and will share best practices, as encouraged under the 2005 Paris Declaration on Aid Effectiveness and the framework to achieve the Millennium Development Goals.
Speaking at a ceremony in Tunis to mark the handover of documents, director of AfDB’s Private Sector Department Tim Turner underscored the importance of trade finance in Africa. "By scaling up its trade finance activities, the African Development Bank is supporting an important growth-enabling activity, which has been affected by the recent global financial crisis," he said.
"By leveraging the experience of strategic partners, such as ADB, AfDB will not only be reducing the financial commitment necessary to ramp up its activities but also facilitate the expansion of African trade with Asia."
ADB’s Trade Finance Programme provided support for $2.8 billion worth of trade in 2010, up from $1.9 billion in 2009. It focuses on countries where trade finance is less readily available. As such, the program does not assume any risk in the People’s Republic of China, India, Republic of Korea, Malaysia or Thailand. The five most active users of the programme last year were banks in Bangladesh, Viet Nam, Pakistan, Sri Lanka and Nepal.
The programme also aims to support smaller firms that typically have more trouble accessing trade finance and to promote trade between developing countries. Around 270 of the 783 deals supported by the programme last year involved small and medium-sized enterprises, while half were conducted between two developing Asian economies.In 2009, AfDB’s Board of Directors approved the Bank’s Trade Finance Initiative (TFI) to provide up to $1 billion of support to African commercial banks and other financial institutions to reinvigorate their trade finance operations. Under the TFI, the Bank initially allocated $500 million for short-term trade finance lines of credit (TF LOC) and $500 million for the Global Trade Liquidity Programme (GTLP) in cooperation with the International Finance Corporation (IFC).
The overarching objective of the African Development Bank Group is to spur sustainable economic development and social progress in its regional member countries (RMCs), thus contributing to poverty reduction. The Bank Group achieves this objective by mobilising and allocating resources for investment in RMCs and providing policy advice and technical assistance to support development efforts.
Sunday, June 26, 2011
Tata Nano comes to Nepal, officially
Tata Motors launched the much-awaited Tata Nano officially in Nepal from today with an introductory price of Rs 798,000 for the standard model.
One can book standard model of Nano at Rs 10,000 and get financing facility too. For those who wish to buy on installment, it will come to an Equated Monthly Installments (EMI) of Rs 11,111. The company is also opening bookings for Nano CX and Nano LX at Rs 20,000 and Rs 30,000, respectively.
"We at Sipradi are proud to bring Tata Nano to Nepal," executive chairman of Sipradi Trading Siddhartha SJB Rana said, adding that customers can now experience the joy and benefit of a stylish feature rich small car. Sipradi Trading will be the Tata Nano distributor in Nepal.
One can book standard model of Nano at Rs 10,000 and get financing facility too. For those who wish to buy on installment, it will come to an Equated Monthly Installments (EMI) of Rs 11,111. The company is also opening bookings for Nano CX and Nano LX at Rs 20,000 and Rs 30,000, respectively.
"We at Sipradi are proud to bring Tata Nano to Nepal," executive chairman of Sipradi Trading Siddhartha SJB Rana said, adding that customers can now experience the joy and benefit of a stylish feature rich small car. Sipradi Trading will be the Tata Nano distributor in Nepal.
Saturday, June 25, 2011
Capital Merchant Bank and Finance on fake lending spree
It seems Capital Merchant Bank and Finance Company – that pulled its shutter down yesterday citing acute cash shortage – has faked accounts and lent some Rs 480 million, according to preliminary investigation.
The probe team found that the finance company has lent Rs 300 million to a non-existent sugar mill and Rs 180 million to yet another non-existent furniture factory, though the probe team suspects the amount could be much bigger.
The central bank delayed its special refinancing request since last one week due to suspicious transaction, according to the sources.
The class C financial institute that closed its operations and went to ask for rescue package yesterday had to return empty handed due to its bad governance.
The central bank has asked the management to immediately start operations as it was illegal to close down daily operations and management has responded positively.
Earlier, Samjhana Finance, United Development Bank, Gorkha Development Bank, Nepal Share Market and Financial Institute and People's Finance had faced trouble due to lack of good corporate governance.
The central bank has been monitoring the finance company since last week.
Since it was facing acute shortage of cash from last one week, the finance company has also applied to the central bank for special refinancing facility but the central bank team was studying its books that were found suspicious.
The bank's management and central bank along with Nepal Finance Companies' Association had yesterday held discussions on the possible rescue of the class C financial institution -- that has 12 branches including its head office at Battisputali in Kathmandu -- has posted Rs 40.84 million profits in the third quarter from Rs 52.43 million in the second quarter, according to its published unaudited report.
The finance company has a Rs 935 million paid up capital and has also been listed in the secondary market. Its shares were traded at Rs 132 per unit at the secondary market last time.
Its financial statement revealed that it has a deposit of Rs 3.04 billion and loan and advances stand at Rs 3.36 billion, though the financial statement of the third quarter shows that its CD ratio stands at 82.84 per cent.
The central bank on June 9 had opened a 'special' refinancing window for banks and financial institutions under lender of the last resort to avert systemic risk from tight liquidity situation. But the central bank has set good governance a key criterion to get the special refinancing facility for the four months period against good loan at 10 per cent interest rates.
On one hand, the financial institutions that are heavily dependent on institutional depositors have been facing problem due to Assets Liability Mismatch and on the other, bad corporate governance has also plagued some of the financial institutions.
Nepal Army's deposit safe
KATHMANDU: Nepal Army has said that its deposit in Capital Merchant Bank and Finance Company is safe, though the exact amount of deposit is yet to calculate, the Army has withdrawn some last week. Of the total Rs 17.50 billion deposit in various banks and financial institutions, Nepal Army has deposited 93 per cent in commercial banks and only seven per cent is deposited in development banks and finance companies. It has planned to invest some Rs 2 billion on its proposed Army Medical College and has notified the banks and financial institutions some four months ago to arrange fund according to their convenience.
The probe team found that the finance company has lent Rs 300 million to a non-existent sugar mill and Rs 180 million to yet another non-existent furniture factory, though the probe team suspects the amount could be much bigger.
The central bank delayed its special refinancing request since last one week due to suspicious transaction, according to the sources.
The class C financial institute that closed its operations and went to ask for rescue package yesterday had to return empty handed due to its bad governance.
The central bank has asked the management to immediately start operations as it was illegal to close down daily operations and management has responded positively.
Earlier, Samjhana Finance, United Development Bank, Gorkha Development Bank, Nepal Share Market and Financial Institute and People's Finance had faced trouble due to lack of good corporate governance.
The central bank has been monitoring the finance company since last week.
Since it was facing acute shortage of cash from last one week, the finance company has also applied to the central bank for special refinancing facility but the central bank team was studying its books that were found suspicious.
The bank's management and central bank along with Nepal Finance Companies' Association had yesterday held discussions on the possible rescue of the class C financial institution -- that has 12 branches including its head office at Battisputali in Kathmandu -- has posted Rs 40.84 million profits in the third quarter from Rs 52.43 million in the second quarter, according to its published unaudited report.
The finance company has a Rs 935 million paid up capital and has also been listed in the secondary market. Its shares were traded at Rs 132 per unit at the secondary market last time.
Its financial statement revealed that it has a deposit of Rs 3.04 billion and loan and advances stand at Rs 3.36 billion, though the financial statement of the third quarter shows that its CD ratio stands at 82.84 per cent.
The central bank on June 9 had opened a 'special' refinancing window for banks and financial institutions under lender of the last resort to avert systemic risk from tight liquidity situation. But the central bank has set good governance a key criterion to get the special refinancing facility for the four months period against good loan at 10 per cent interest rates.
On one hand, the financial institutions that are heavily dependent on institutional depositors have been facing problem due to Assets Liability Mismatch and on the other, bad corporate governance has also plagued some of the financial institutions.
Nepal Army's deposit safe
KATHMANDU: Nepal Army has said that its deposit in Capital Merchant Bank and Finance Company is safe, though the exact amount of deposit is yet to calculate, the Army has withdrawn some last week. Of the total Rs 17.50 billion deposit in various banks and financial institutions, Nepal Army has deposited 93 per cent in commercial banks and only seven per cent is deposited in development banks and finance companies. It has planned to invest some Rs 2 billion on its proposed Army Medical College and has notified the banks and financial institutions some four months ago to arrange fund according to their convenience.
Asia leads world broadband growth
The number of fixed broadband lines in the world grew by 2.9 per cent or 15.2 million subscribers in the first quarter to a total 540.63 million, according to research by Point Topic for the Broadband Forum.
The figures released at the Communicasia trade show in Signapore show growth is the strongest in Asia, which grew by 3.9 per cent in the three months and 16.2 per cent year-on-year to 226.44 million fixed broadband subscribers at the end of March.
The Middle East and Africa region followed with 2.4 per cent quarterly growth and 11.5 per cent annual growth to 16.50 million subscribers. Europe grew by two per cent sequentially and 0.2 per cent annually to 159.774 million subscribers, and the Americas were up by 2.3 per cent versus fourth quarter and 8.6 per cent year-on-year to 137.97 million.
Worldwide, this is the strongest growth since late 2009. It's due in part to demand for broadband in China, which accounted for 42 per cent of net additions in first quarter. Growth in broadband supports IPTV as well, which grew by 6.4 per cent in the quarter and 34 per cent in the past year to 43.2 million users at the end of March.
France remains the largest market with over 10.6 million IPTV customers, followed by China with 9.8 million. In terms of access technologies, fibre continues to grow the fastest, expanding by 5.8 per cent in the three months to 76.2 million lines.
DSL remains the most common access method, up by 2.3 per cent to 341.6 million users, followed by cable with 108.8 million broadband lines, up by 2.8 per cent from the end of 2010. The figures included fixed wireless for the first time, which had 9.5 million broadband users at the end of March.
GCC cut roaming rates by another 30 per cent
KATHMANDU: GCC countries will cut regional roaming rates by 30 per cent in July. A meeting of Gulf telecommunications regulators in Abu Dhabi agreed to implement the second cut in prices, after an earlier 30 per cent cut in September 2010, the UAE regulator announced. The six Gulf Cooperation Council (GCC) countries are Saudi Arabia, Kuwait, Qatar, Oman, Bahrain and the UAE. The meeting also discussed the transition to digital broadcasting in the region, service charges among Arab countries and other cross-border issues.
The figures released at the Communicasia trade show in Signapore show growth is the strongest in Asia, which grew by 3.9 per cent in the three months and 16.2 per cent year-on-year to 226.44 million fixed broadband subscribers at the end of March.
The Middle East and Africa region followed with 2.4 per cent quarterly growth and 11.5 per cent annual growth to 16.50 million subscribers. Europe grew by two per cent sequentially and 0.2 per cent annually to 159.774 million subscribers, and the Americas were up by 2.3 per cent versus fourth quarter and 8.6 per cent year-on-year to 137.97 million.
Worldwide, this is the strongest growth since late 2009. It's due in part to demand for broadband in China, which accounted for 42 per cent of net additions in first quarter. Growth in broadband supports IPTV as well, which grew by 6.4 per cent in the quarter and 34 per cent in the past year to 43.2 million users at the end of March.
France remains the largest market with over 10.6 million IPTV customers, followed by China with 9.8 million. In terms of access technologies, fibre continues to grow the fastest, expanding by 5.8 per cent in the three months to 76.2 million lines.
DSL remains the most common access method, up by 2.3 per cent to 341.6 million users, followed by cable with 108.8 million broadband lines, up by 2.8 per cent from the end of 2010. The figures included fixed wireless for the first time, which had 9.5 million broadband users at the end of March.
GCC cut roaming rates by another 30 per cent
KATHMANDU: GCC countries will cut regional roaming rates by 30 per cent in July. A meeting of Gulf telecommunications regulators in Abu Dhabi agreed to implement the second cut in prices, after an earlier 30 per cent cut in September 2010, the UAE regulator announced. The six Gulf Cooperation Council (GCC) countries are Saudi Arabia, Kuwait, Qatar, Oman, Bahrain and the UAE. The meeting also discussed the transition to digital broadcasting in the region, service charges among Arab countries and other cross-border issues.
Friday, June 24, 2011
Nepal escapes possibility of blacklisting for three months
Nepal escaped possibility of blacklisting by the Financial Action task Force (FATF) for another three months as the Legislature Parliament today ratified two key UN Conventions to check the flow of dirty money.
"The passing of International Convention for the Suppression of the Financing of Terrorism-1999 and UN Convention Against Transnational Organised Crime from the parliament has upgraded Nepal's status," said a member, who returned from the Mexico meeting on Nepal's review today.
Nepal that was under high risk country in the FATF's -- a global anti-money laundering agency -- ranking now is upgraded to 'review under monitor' status till November.
However, Nepal has to now pass remaining two bills – Mutual Legal Assistance Bill and Extradition Bill -- and bring some infeastructural reforms by November, when the FATF meeting will again review Nepal's progress.
Central bank governor Dr Yubraj Khatiwada, law secretary Madhav Poudel and joint secretary at the Finance Ministry Mahendra Man Gurung left for Mexico on June 18 to take part in the plenary sessions of joint FATF. The governor appraised International Cooperation Review Group undear FATF on Nepal's progress and took part with other 35 member states to discuss on progress on Anti-Money Laundering in their respective countries.
Earlier, the intra-party feud in the UCPN-Maoist has delayed the ratification of the UN Conventions.
Due to the rift in UCPN-Maoists Finance Minister Bharat Mohan Adhikari registered both the conventions at the parliamentary secretariat as Home Minister Krishna Bahadur Mahara refused to register UN Convention Against Transnational Organised Crime.
A country has to fulfill 40 plus nine special recommendations of Financial Action Task Force to comply with the international Anti-Money Laundering practice.
Earlier, the regional review meeting of FATF in Macau on May 13 had asked Nepal to submit the progress report by June 21 before its plenary takes place on June 20-24 in Mexico. Nepal had in the Macau meeting also requested for deadline extension to meet the requirements as the country is passing through transitional period.
The FATF has forty plus nine special recommendations for the countries to comply not to be black listed. Of them, the nine special recommendations are aimed at checking terrorist financing.
In the evening, the House today ratified the conventions by an overwhelming majority, though three Constituent Assembly (CA) members of Nepal Workers and Peasants’ Party voted against the conventions.
The UCPN-Maoists had filed two amendment proposals this morning seeking reservations on the part of definition of 'terrorism' and 'organised crime' of the convention, the party withdrew it afterwards.
UCPN-Maoists CA member Ekraj Bhandari had filed amendment proposals seeking to add 'No acts related to political activities will be taken as criminal activity and organised crime' in Article 2 of both the conventions but the Convention has no room to add any amendments. "But it could be addressed UCPN-Maoists concerns in the Act," said Adhikari.
A section in the UCPN-M was against ratifying the conventions fearing that the party’s activities — during a decade-long insurgency and in future — might come under scrutiny.
An amendment proposal seeking reservation on Article 24 of the first convention, filed by CPN-UML lawmaker Ushakala Rai, was, however, passed.
"The passing of International Convention for the Suppression of the Financing of Terrorism-1999 and UN Convention Against Transnational Organised Crime from the parliament has upgraded Nepal's status," said a member, who returned from the Mexico meeting on Nepal's review today.
Nepal that was under high risk country in the FATF's -- a global anti-money laundering agency -- ranking now is upgraded to 'review under monitor' status till November.
However, Nepal has to now pass remaining two bills – Mutual Legal Assistance Bill and Extradition Bill -- and bring some infeastructural reforms by November, when the FATF meeting will again review Nepal's progress.
Central bank governor Dr Yubraj Khatiwada, law secretary Madhav Poudel and joint secretary at the Finance Ministry Mahendra Man Gurung left for Mexico on June 18 to take part in the plenary sessions of joint FATF. The governor appraised International Cooperation Review Group undear FATF on Nepal's progress and took part with other 35 member states to discuss on progress on Anti-Money Laundering in their respective countries.
Earlier, the intra-party feud in the UCPN-Maoist has delayed the ratification of the UN Conventions.
Due to the rift in UCPN-Maoists Finance Minister Bharat Mohan Adhikari registered both the conventions at the parliamentary secretariat as Home Minister Krishna Bahadur Mahara refused to register UN Convention Against Transnational Organised Crime.
A country has to fulfill 40 plus nine special recommendations of Financial Action Task Force to comply with the international Anti-Money Laundering practice.
Earlier, the regional review meeting of FATF in Macau on May 13 had asked Nepal to submit the progress report by June 21 before its plenary takes place on June 20-24 in Mexico. Nepal had in the Macau meeting also requested for deadline extension to meet the requirements as the country is passing through transitional period.
The FATF has forty plus nine special recommendations for the countries to comply not to be black listed. Of them, the nine special recommendations are aimed at checking terrorist financing.
In the evening, the House today ratified the conventions by an overwhelming majority, though three Constituent Assembly (CA) members of Nepal Workers and Peasants’ Party voted against the conventions.
The UCPN-Maoists had filed two amendment proposals this morning seeking reservations on the part of definition of 'terrorism' and 'organised crime' of the convention, the party withdrew it afterwards.
UCPN-Maoists CA member Ekraj Bhandari had filed amendment proposals seeking to add 'No acts related to political activities will be taken as criminal activity and organised crime' in Article 2 of both the conventions but the Convention has no room to add any amendments. "But it could be addressed UCPN-Maoists concerns in the Act," said Adhikari.
A section in the UCPN-M was against ratifying the conventions fearing that the party’s activities — during a decade-long insurgency and in future — might come under scrutiny.
An amendment proposal seeking reservation on Article 24 of the first convention, filed by CPN-UML lawmaker Ushakala Rai, was, however, passed.
Capital Merchant Bank and Finance Company pulls shutter down
Yet another finance company -- Capital Merchant Bank and Finance Company -- pulled its shutter down today citing acute cash shortage.
However, spokesperson of the central bank Bhaskar Mani Gyanwali said that management cannot shut down whole operation and stop payments with an excuse of liquidity crunch.
"It is illegal," he said, adding that the central bank had been monitoring the finance company since last week. "We have instructed its management to resume operation and they have also expressed commitment to try their best to recover loan and pay its customers," he added.
Capital Merchant Bank and Finance Company -- that was facing acute shortage of cash from last one week -- has also applied to the central bank for special refinancing facility and central bank team was studying its books.
"After a week-long wait bowing to the pressure of withdrawal, we decided to close down," said a senior official of the finance company without wanting to be named.
After closing the transaction, they went to the central bank to ask for rescue package.
The bank's management and central bank along with Nepal Finance Companies' Association today held discussions on the possible rescue of the class C financial institution -- that has 12 branches including its head office at Battisputali in Kathmandu -- has posted Rs 40.84 million profits in the third quarter. It has posted Rs 52.43 million profits in the second quarter, according to its published unaudited report.
The finance company that has CD ration at 82.84 per cent by the third quarter has Rs 935 million paid up capital. It has also floated shares that were traded at Rs 132 per unit at the secondary market last time.
President of Nepal Finance Companies' Association Rajendra Man Shakya, who was in the talks, however, said that the central bank has to release special financing facility quicker to rescue the financial institutions.
The central bank on June 9 had opened a 'special' refinancing window for banks and financial institutions under lender of the last resort to avert systemic risk from tight liquidity situation.But the central bank has set good governance as the condition to get the special refinancing facility for the four months period against good loan at 10 per cent interest rates.
"The central bank seemed little reluctant pushing the financial institutions to closure," another finance company that has applied for the special refinancing facility said.
"Though, refinancing facility is a short-term measure, there is no alternative for the moment," Shakya said, adding that the central bank should bring a long term strategy to solve the crisis.
Due to low depositors' confidence deposit mobilisation could not grow at the rate it used to grow in the past years flaring a series of failures of financial institutions.
On one hand, the financial institutions that are heavily dependent on institutional depositors have been facing problem due to Assets Liability mismatch and on the other bad corporate governance has also plagued some of the financial instutitons.
Last week, the Parliamentary committee has also directed the central bank to prepare a work plan to avert the systemic crisis in case the current liquidity crunch prolongs.
However, spokesperson of the central bank Bhaskar Mani Gyanwali said that management cannot shut down whole operation and stop payments with an excuse of liquidity crunch.
"It is illegal," he said, adding that the central bank had been monitoring the finance company since last week. "We have instructed its management to resume operation and they have also expressed commitment to try their best to recover loan and pay its customers," he added.
Capital Merchant Bank and Finance Company -- that was facing acute shortage of cash from last one week -- has also applied to the central bank for special refinancing facility and central bank team was studying its books.
"After a week-long wait bowing to the pressure of withdrawal, we decided to close down," said a senior official of the finance company without wanting to be named.
After closing the transaction, they went to the central bank to ask for rescue package.
The bank's management and central bank along with Nepal Finance Companies' Association today held discussions on the possible rescue of the class C financial institution -- that has 12 branches including its head office at Battisputali in Kathmandu -- has posted Rs 40.84 million profits in the third quarter. It has posted Rs 52.43 million profits in the second quarter, according to its published unaudited report.
The finance company that has CD ration at 82.84 per cent by the third quarter has Rs 935 million paid up capital. It has also floated shares that were traded at Rs 132 per unit at the secondary market last time.
President of Nepal Finance Companies' Association Rajendra Man Shakya, who was in the talks, however, said that the central bank has to release special financing facility quicker to rescue the financial institutions.
The central bank on June 9 had opened a 'special' refinancing window for banks and financial institutions under lender of the last resort to avert systemic risk from tight liquidity situation.But the central bank has set good governance as the condition to get the special refinancing facility for the four months period against good loan at 10 per cent interest rates.
"The central bank seemed little reluctant pushing the financial institutions to closure," another finance company that has applied for the special refinancing facility said.
"Though, refinancing facility is a short-term measure, there is no alternative for the moment," Shakya said, adding that the central bank should bring a long term strategy to solve the crisis.
Due to low depositors' confidence deposit mobilisation could not grow at the rate it used to grow in the past years flaring a series of failures of financial institutions.
On one hand, the financial institutions that are heavily dependent on institutional depositors have been facing problem due to Assets Liability mismatch and on the other bad corporate governance has also plagued some of the financial instutitons.
Last week, the Parliamentary committee has also directed the central bank to prepare a work plan to avert the systemic crisis in case the current liquidity crunch prolongs.
Thursday, June 23, 2011
Experts urge government not to bring distributive budget
Experts today advised the government not to bring distributive and expansionary budget to check price hike.
"The budget should not be distributive but aim at empowering the people," said former governor Deependra Bahadur Chhetri, speaking at launching programme of 'Model Budget for the fiscal year 2011-12' organised by National Council for Economic and Development Research Nepal, here today.
Deputy prime minister and finance minister Bharat Mohan Adhikari yesterday tabled the Priorities and Principles for the budget for the fiscal year 2011-12 at the Parliament that will hold pre-budget discussion from tomorrow.
The budget should generate employment at the local level by making it rural-centric, he said, adding that the reverse trend to the current work force out flow could be possible only through generating employment at the rural areas.
"The expansionary budget would not help boost economic growth rather push the price up promoting consumerism," he added.
Another economist Dr Chiranjivi Nepal echoed him. "The budget must help control price hike that is hovering around 10 per cent against the current fiscal year's budget target of seven per cent," he said, adding that lack of regular supply of power has hurt the production sector decreasing the productivity and increasing inflation. "Regular supply is directly related to productivity and price hike," Nepal added.
The Model Budget has suggested the government to bring a strategic plan to fight price hike and focus on solving current financial problem, infrastructure development, energy, transportation, agriculture, tourism and security, for sustainable development, apart from regional focus.
Suggesting to form a Common Minimum Programme among the political parties, it has also suggested to increase social security blanket. "Senior citizens, physically impaired and widow should be paid Rs 3,500 from the current Rs 500 per month," suggested coordinator of the Model Budget preparation committee Dr Chandramani Adhikari.
However, finance secretary Krishnahari Adhikari said that the increment is not possible as it would increase a huge liability to the government. "The government has been allocating Rs 8 billion to Rs 10 billion for the fund currently and the increment would create seven times more liability on government," he said, defending that the government has been able to spend on development activities, though not as envisioned by the successive budgets since last three years.
The Model Budget has projected Rs 390 billion budget for the fiscal year, however, National Planning Commission has already given a ceiling of Rs 381 billion for the next fiscal year's budget to the Finance Ministry.
"The Model Budget has allocated Rs 205 billion under recurrent expenditure, Rs 165 under capital expenditure and Rs 20 billion for the payment of Principle and interest of loans," Adhikari said, adding that the government should target Rs 248 billion revenue mobilisation, Rs 105 billion foreign aid and grants and Rs 37 billion domestic borrowing.
However Baskota said that the government has to set aside Rs 26 billion to pay for Principle and interest of loans according to the Office of Comptroller General. "But the government will take suggestions from the Model Budget," he promised.
Budget Outlay
2006-07 -- Rs 143.91 billion
2007-08 -- Rs 168.99 billion
2008-09 -- Rs 236 billion
2009-10 -- Rs 285.93 billion
2010-11 -- Rs 337.9 billion
2011-12 -- Rs 381 billion*
(*National Planning Commission’s ceiling. Source: Finance Ministry)
"The budget should not be distributive but aim at empowering the people," said former governor Deependra Bahadur Chhetri, speaking at launching programme of 'Model Budget for the fiscal year 2011-12' organised by National Council for Economic and Development Research Nepal, here today.
Deputy prime minister and finance minister Bharat Mohan Adhikari yesterday tabled the Priorities and Principles for the budget for the fiscal year 2011-12 at the Parliament that will hold pre-budget discussion from tomorrow.
The budget should generate employment at the local level by making it rural-centric, he said, adding that the reverse trend to the current work force out flow could be possible only through generating employment at the rural areas.
"The expansionary budget would not help boost economic growth rather push the price up promoting consumerism," he added.
Another economist Dr Chiranjivi Nepal echoed him. "The budget must help control price hike that is hovering around 10 per cent against the current fiscal year's budget target of seven per cent," he said, adding that lack of regular supply of power has hurt the production sector decreasing the productivity and increasing inflation. "Regular supply is directly related to productivity and price hike," Nepal added.
The Model Budget has suggested the government to bring a strategic plan to fight price hike and focus on solving current financial problem, infrastructure development, energy, transportation, agriculture, tourism and security, for sustainable development, apart from regional focus.
Suggesting to form a Common Minimum Programme among the political parties, it has also suggested to increase social security blanket. "Senior citizens, physically impaired and widow should be paid Rs 3,500 from the current Rs 500 per month," suggested coordinator of the Model Budget preparation committee Dr Chandramani Adhikari.
However, finance secretary Krishnahari Adhikari said that the increment is not possible as it would increase a huge liability to the government. "The government has been allocating Rs 8 billion to Rs 10 billion for the fund currently and the increment would create seven times more liability on government," he said, defending that the government has been able to spend on development activities, though not as envisioned by the successive budgets since last three years.
The Model Budget has projected Rs 390 billion budget for the fiscal year, however, National Planning Commission has already given a ceiling of Rs 381 billion for the next fiscal year's budget to the Finance Ministry.
"The Model Budget has allocated Rs 205 billion under recurrent expenditure, Rs 165 under capital expenditure and Rs 20 billion for the payment of Principle and interest of loans," Adhikari said, adding that the government should target Rs 248 billion revenue mobilisation, Rs 105 billion foreign aid and grants and Rs 37 billion domestic borrowing.
However Baskota said that the government has to set aside Rs 26 billion to pay for Principle and interest of loans according to the Office of Comptroller General. "But the government will take suggestions from the Model Budget," he promised.
Budget Outlay
2006-07 -- Rs 143.91 billion
2007-08 -- Rs 168.99 billion
2008-09 -- Rs 236 billion
2009-10 -- Rs 285.93 billion
2010-11 -- Rs 337.9 billion
2011-12 -- Rs 381 billion*
(*National Planning Commission’s ceiling. Source: Finance Ministry)
Sebon grants licence to five more companies
Securities Board of Nepal (Sebon) today granted license to five more brokers.
Including the new five companies, the number of total new brokerage firms has reached 14, the capital market regulator said, adding that Sunny Securities, South Asian Bulls, Lynch Stock Market, Imperial Securities Company and Creative Securities Company got the licence today under the Securities Businessperson (Stock Broker, Dealer and Market Maker) Regulation, 2007.
The board has granted the licence after they fulfilled the criterion like recruitment of human resources and infrastructure requirements as directed by the regulation.
The regulator will issue licence to all the companies that have applied once they complete all the mandatory instructions according to the regulation.
Earlier, the board had issued licence to Dakshinkali Investment and Securities, Kalika Securities, Kohinoor Investment and Securities, Swarnalaxmi Securities, Dipsikha Dhitopattra Karobar Company, Secured Securities and Vision Securities to operate as share brokers in the Nepali capital market.
The regulator had already granted Letter of Intent (LoI) to 20 aspirant brokerage firms to make the number of total brokers to 50.
Though, the selected brokers still need to be granted membership by the Nepal Stock Exchange to start the operation, they are waiting for the green signal from the Nepse. The stock exchange will have to provide training to the new brokers before letting them start share trading.
The broker selection process that had started some three-and-a-half years ago has finally drawn to an end with Sebon granting license to new brokers for operation.Earlier in 2007, the capital market regulator had decided to add 27 more brokers to the existing 23 brokers to make it a total of 50 brokers as the share market was on a boom. “The limited numbers of brokers was not sufficient to cater to all the investors at the time of boom forcing the regulator to add more brokers.
However, the process was interrupted by Commission for Investigation of Abuse of Authority questioning transparency of the selection process. The process finally resumed in October 2011.
Market rally continues
KATHMANDU: The secondary market continued its rally since the starting of this week. The market today gained a whopping 20 points in a single day's trading pushing the secondary market to 364.4 points. Hydropower subgroup gained 50.91 points followed by others sub group (28.19 points) and banks (23.19 points) forcing the market to use circuit breaker.
Including the new five companies, the number of total new brokerage firms has reached 14, the capital market regulator said, adding that Sunny Securities, South Asian Bulls, Lynch Stock Market, Imperial Securities Company and Creative Securities Company got the licence today under the Securities Businessperson (Stock Broker, Dealer and Market Maker) Regulation, 2007.
The board has granted the licence after they fulfilled the criterion like recruitment of human resources and infrastructure requirements as directed by the regulation.
The regulator will issue licence to all the companies that have applied once they complete all the mandatory instructions according to the regulation.
Earlier, the board had issued licence to Dakshinkali Investment and Securities, Kalika Securities, Kohinoor Investment and Securities, Swarnalaxmi Securities, Dipsikha Dhitopattra Karobar Company, Secured Securities and Vision Securities to operate as share brokers in the Nepali capital market.
The regulator had already granted Letter of Intent (LoI) to 20 aspirant brokerage firms to make the number of total brokers to 50.
Though, the selected brokers still need to be granted membership by the Nepal Stock Exchange to start the operation, they are waiting for the green signal from the Nepse. The stock exchange will have to provide training to the new brokers before letting them start share trading.
The broker selection process that had started some three-and-a-half years ago has finally drawn to an end with Sebon granting license to new brokers for operation.Earlier in 2007, the capital market regulator had decided to add 27 more brokers to the existing 23 brokers to make it a total of 50 brokers as the share market was on a boom. “The limited numbers of brokers was not sufficient to cater to all the investors at the time of boom forcing the regulator to add more brokers.
However, the process was interrupted by Commission for Investigation of Abuse of Authority questioning transparency of the selection process. The process finally resumed in October 2011.
Market rally continues
KATHMANDU: The secondary market continued its rally since the starting of this week. The market today gained a whopping 20 points in a single day's trading pushing the secondary market to 364.4 points. Hydropower subgroup gained 50.91 points followed by others sub group (28.19 points) and banks (23.19 points) forcing the market to use circuit breaker.
Wednesday, June 22, 2011
Fuel import burns total export of country
It should be a warning call for the government as petroleum import is burning the country’s total exports.
"Nepal imported Rs 59.53 billion worth petroleum products in the first 10 months of the current fiscal year, whereas total exports stood at Rs 52.67 billion making the total exports' earning lesser than only petroleum products' import bill," said Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari, presenting Priorities and Principals of the budget for the fiscal year 2011-12 in the Parliament today.
The country’s total exports will not be enough to import even the petroleum products due to rising petroleum products consumption and price in the international market.
"It is going to be a serious challenge for the government,” he said, adding that the sole petroleum importer, Nepal Oil Corporation, has borrowed Rs 2.63 billion from government and additional Rs 3.30 billion from Employees Provident Fund and Citizen Investment Trust.
“The government will be forced to adjust the lending under the development expenses as it was earlier not mentioned in the budget,” Adhikari said, presenting the Priorities and Principals for the next budget in the Parliament for pre-budget discussion that is going to be held first time since the Constituent Assembly election. The parliament will start pre budget discussion from June 24.
Though the next budget’s Priorities and Principals has spelled implementation of Bio-fuel Policy to reduce the import of fossil fuel, the lawmakers suspected government’s ability to curb fuel import.
Another power utility Electricity Authority (NEA) is also not in a good financial health increasing the challenges to fulfill the growing energy needs of the country to boost manufacturing sector. But the finance minister said that the budget aims at restructuring of the Nepal Electricity Authority apart from expansion of transmission lines and promoting hydropower projects through Energy Development Bank.
"The cost of doing business has increased due to lack of regular power supply coupled with rising interest rates hurting industrial sectors’ growth,” he said.
The rising cost of production and supply constraints fuelled the price in the market. Though, the current fiscal year’s budget has projected to contain the price hike at seven per cent, the government could not crack whip and it is hovering around 10 per cent. Adhikari, however, promised to tackle price hike through Monetary Policy.
"On top of low production, productivity has also plunged making the domestic production less competitive in the international market,” he said, promising that his budget will be in line with Three Year Interim Plan that has envisioned poverty reduction through employment generation, and inclusive and justifiable economic growth for a sustainable peace. He has also said to create investment-friendly environment for private sector investment to excelarate economic growth.
Apart from his regular populist programmes like Aafno Gau Aafai Banau (Develope one's own village), Gau Gau ma Sahakari, Ghar Ghar ma Rojgari (Cooperatives in every Village and employment in every house), the Priorities and Principals has also spelled some infrastructure projects like Fast Track, Mi-Hill Highway and Model Village in every district.
"Nepal imported Rs 59.53 billion worth petroleum products in the first 10 months of the current fiscal year, whereas total exports stood at Rs 52.67 billion making the total exports' earning lesser than only petroleum products' import bill," said Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari, presenting Priorities and Principals of the budget for the fiscal year 2011-12 in the Parliament today.
The country’s total exports will not be enough to import even the petroleum products due to rising petroleum products consumption and price in the international market.
"It is going to be a serious challenge for the government,” he said, adding that the sole petroleum importer, Nepal Oil Corporation, has borrowed Rs 2.63 billion from government and additional Rs 3.30 billion from Employees Provident Fund and Citizen Investment Trust.
“The government will be forced to adjust the lending under the development expenses as it was earlier not mentioned in the budget,” Adhikari said, presenting the Priorities and Principals for the next budget in the Parliament for pre-budget discussion that is going to be held first time since the Constituent Assembly election. The parliament will start pre budget discussion from June 24.
Though the next budget’s Priorities and Principals has spelled implementation of Bio-fuel Policy to reduce the import of fossil fuel, the lawmakers suspected government’s ability to curb fuel import.
Another power utility Electricity Authority (NEA) is also not in a good financial health increasing the challenges to fulfill the growing energy needs of the country to boost manufacturing sector. But the finance minister said that the budget aims at restructuring of the Nepal Electricity Authority apart from expansion of transmission lines and promoting hydropower projects through Energy Development Bank.
"The cost of doing business has increased due to lack of regular power supply coupled with rising interest rates hurting industrial sectors’ growth,” he said.
The rising cost of production and supply constraints fuelled the price in the market. Though, the current fiscal year’s budget has projected to contain the price hike at seven per cent, the government could not crack whip and it is hovering around 10 per cent. Adhikari, however, promised to tackle price hike through Monetary Policy.
"On top of low production, productivity has also plunged making the domestic production less competitive in the international market,” he said, promising that his budget will be in line with Three Year Interim Plan that has envisioned poverty reduction through employment generation, and inclusive and justifiable economic growth for a sustainable peace. He has also said to create investment-friendly environment for private sector investment to excelarate economic growth.
Apart from his regular populist programmes like Aafno Gau Aafai Banau (Develope one's own village), Gau Gau ma Sahakari, Ghar Ghar ma Rojgari (Cooperatives in every Village and employment in every house), the Priorities and Principals has also spelled some infrastructure projects like Fast Track, Mi-Hill Highway and Model Village in every district.
Asia must take radical steps towards clean energy
With an energy crisis looming, Asian Development Bank (ADB) president Haruhiko Kuroda today called on Asian nations to ‘take radical steps’ to increase energy efficiency and invest in renewable energy.
Asia and the Pacific’s strong economic growth and its increasing population are generating the world’s fastest growing demand for energy. It is estimated that energy requirements in the region will double by 2030. If left unchecked, the lack of energy security may reverse the region’s hard-won gains in poverty reduction.
Continued reliance on fossil fuels will also increase the threat of climate change, thus affecting millions of Asia’s poor and vulnerable through increased natural disasters and shortages in food and water.
“Asians have more to lose from climate change than any other people. The climate fight will be won or lost by decisions made in this region,” said Kuroda in an introduction to the 6th Asia Clean Energy Forum (ACEF) in Manila today. “An important key to lowering energy intensity is the elimination of fossil fuel subsidies and transition to renewable energy. Asia must also take radical steps to increase energy efficiency.
”To meet the rising demand for energy and improve the lives of 800 million people in Asia with no access to electricity, a significant push is needed to fast track new business models and policies for clean energy development. With over 500 participants from 60 countries in attendance, the ACEF is being co-organised by the United States Agency for International Development, the World Resources Institute, and ADB to promote dialogue on scaling up clean energy efforts in Asia and the Pacific.
In 2010, ADB invested $1.76 billion in clean energy and is on target to meet its goal of reaching $2 billion annually by 2013. ADB’s Asia Solar Energy Initiative was launched in 2010 to help develop 3,000 megawatts of new solar energy by 2013. In addition, ADB has recently announced its plan to inject $60 million into three venture capital funds that will provide early stage financing support for new climate technology products. This initiative is expected to leverage over $400 million in private sector investment.
Guest speakers at the ACEF include Amory Lovins, Cofounder, Chairman and Chief Scientist, Rocky Mountain Institute (by video); and Mohamed El-Ashry, Senior Fellow, UN Foundation and Chairman of the Renewable Energy Policy Network for the 21st Century.
Asia and the Pacific’s strong economic growth and its increasing population are generating the world’s fastest growing demand for energy. It is estimated that energy requirements in the region will double by 2030. If left unchecked, the lack of energy security may reverse the region’s hard-won gains in poverty reduction.
Continued reliance on fossil fuels will also increase the threat of climate change, thus affecting millions of Asia’s poor and vulnerable through increased natural disasters and shortages in food and water.
“Asians have more to lose from climate change than any other people. The climate fight will be won or lost by decisions made in this region,” said Kuroda in an introduction to the 6th Asia Clean Energy Forum (ACEF) in Manila today. “An important key to lowering energy intensity is the elimination of fossil fuel subsidies and transition to renewable energy. Asia must also take radical steps to increase energy efficiency.
”To meet the rising demand for energy and improve the lives of 800 million people in Asia with no access to electricity, a significant push is needed to fast track new business models and policies for clean energy development. With over 500 participants from 60 countries in attendance, the ACEF is being co-organised by the United States Agency for International Development, the World Resources Institute, and ADB to promote dialogue on scaling up clean energy efforts in Asia and the Pacific.
In 2010, ADB invested $1.76 billion in clean energy and is on target to meet its goal of reaching $2 billion annually by 2013. ADB’s Asia Solar Energy Initiative was launched in 2010 to help develop 3,000 megawatts of new solar energy by 2013. In addition, ADB has recently announced its plan to inject $60 million into three venture capital funds that will provide early stage financing support for new climate technology products. This initiative is expected to leverage over $400 million in private sector investment.
Guest speakers at the ACEF include Amory Lovins, Cofounder, Chairman and Chief Scientist, Rocky Mountain Institute (by video); and Mohamed El-Ashry, Senior Fellow, UN Foundation and Chairman of the Renewable Energy Policy Network for the 21st Century.
Tuesday, June 21, 2011
Nepal listed in failed states category
Nepal along with Pakistan, Bangladesh, and Sri Lanka is featured in the list of the most failed states, according to the prestigious US Foreign Policy magazine’s latest ranking.
Nepal stands at 27 among the 60 countries that is dominated by the African countries. Pakistan stands at 12, Myanmar at 18, Bangladesh at 25, Sri Lanka at 29 and Bhutan stands at 50 in a the list of 60 countries.
"Nepal is the poorest country in South Asia, according to the United Nations (UN), and that's unlikely to change until the peace process is implemented and security restored. There are signs that the UCPN-Maoists may be losing patience — and thinking about going back to the trenches to fight for more," the report suspected.
Other countries in the top 10 are Chad, Sudan, Democratic Republic of Congo, Haiti, Zimbabwe, Afghanistan Central African Republic and Iraq.
On Pakistan, the report said, "Pakistan has long been dubbed the world's most dangerous country in Washington policy circles" and "yet Pakistan isn't just dangerous for the West -- it's often a danger to its own people."
On Bangladesh, the report said, two of five Bangladeshis live under the poverty line. Any improvements will also be fighting the environmental clock. If sea levels rise just by 1 metre, scientists warn, 17 per cent of the country could be submerged.
On Sri Lanka, it said, "The government's final push against the rebels relied on the shelling of civilians and other atrocities, according to a 2010 report by the International Crisis Group. "The most recent statistics from last year indicate that some 327,000 are still displaced from the conflict. Despite the pronounced fractures still lingering, the Sinhalese-dominated government in Colombo seems eager to forget the past," it added.
Nepal stands at 27 among the 60 countries that is dominated by the African countries. Pakistan stands at 12, Myanmar at 18, Bangladesh at 25, Sri Lanka at 29 and Bhutan stands at 50 in a the list of 60 countries.
"Nepal is the poorest country in South Asia, according to the United Nations (UN), and that's unlikely to change until the peace process is implemented and security restored. There are signs that the UCPN-Maoists may be losing patience — and thinking about going back to the trenches to fight for more," the report suspected.
Other countries in the top 10 are Chad, Sudan, Democratic Republic of Congo, Haiti, Zimbabwe, Afghanistan Central African Republic and Iraq.
On Pakistan, the report said, "Pakistan has long been dubbed the world's most dangerous country in Washington policy circles" and "yet Pakistan isn't just dangerous for the West -- it's often a danger to its own people."
On Bangladesh, the report said, two of five Bangladeshis live under the poverty line. Any improvements will also be fighting the environmental clock. If sea levels rise just by 1 metre, scientists warn, 17 per cent of the country could be submerged.
On Sri Lanka, it said, "The government's final push against the rebels relied on the shelling of civilians and other atrocities, according to a 2010 report by the International Crisis Group. "The most recent statistics from last year indicate that some 327,000 are still displaced from the conflict. Despite the pronounced fractures still lingering, the Sinhalese-dominated government in Colombo seems eager to forget the past," it added.
Strategic reforms crucial for stolen asset recovery
Recent revolutions and uprisings in the Middle East and North Africa have raised questions about the capacity of financial centers to stop the flow of resources generated by corruption. Barriers to Asset Recovery, released today by the World Bank Group and the United Nations Office on Drugs and Crime’s (UNODC) Stolen Asset Recovery (StAR) Initiative, advises policy makers on reforms that will enable the recovery of stolen assets.
The study recommends eight strategic actions and other recommendations for policy makers, legislators and practitioners. They include the implementation of new policies and operational procedures to foster trust and mentor other jurisdictions, legislative reforms to facilitate freezing and confiscation of stolen assets, and better application of existing anti-money laundering measures.
A complex process, asset recovery depends on rapid international cooperation and often involves the exchange of sensitive information. It also requires practitioners to be familiar with legal tools and procedures in their own country as well as partner countries.
“There are many obstacles to asset recovery. Not only is it a specialized legal process filled with delays and uncertainty, but there are also language barriers and a lack of trust when working with other countries,” said Kevin Stephenson, World Bank Senior Financial Sector Specialist and lead author of the study. “In jurisdictions that do not prioritize these cases, practitioners do not develop the necessary expertise and agencies are not adequately resourced.”
The authors consulted over 50 practitioners around the globe, who gave information based on their practical experience. The study analyses the barriers to recovering stolen assets in foreign jurisdictions, and introduces examples of good practices. It also provides information about asset recovery regimes in various financial centers.
“This study is a powerful tool to help policy makers design a comprehensive strategy for stolen asset recovery, and implement the necessary reforms,” said Jean Pesme, Manager of the World Bank’s Financial Market Integrity Programme and StAR Coordinator. “It can also aid practitioners by showing them how to use existing asset recovery tools more effectively
The study recommends eight strategic actions and other recommendations for policy makers, legislators and practitioners. They include the implementation of new policies and operational procedures to foster trust and mentor other jurisdictions, legislative reforms to facilitate freezing and confiscation of stolen assets, and better application of existing anti-money laundering measures.
A complex process, asset recovery depends on rapid international cooperation and often involves the exchange of sensitive information. It also requires practitioners to be familiar with legal tools and procedures in their own country as well as partner countries.
“There are many obstacles to asset recovery. Not only is it a specialized legal process filled with delays and uncertainty, but there are also language barriers and a lack of trust when working with other countries,” said Kevin Stephenson, World Bank Senior Financial Sector Specialist and lead author of the study. “In jurisdictions that do not prioritize these cases, practitioners do not develop the necessary expertise and agencies are not adequately resourced.”
The authors consulted over 50 practitioners around the globe, who gave information based on their practical experience. The study analyses the barriers to recovering stolen assets in foreign jurisdictions, and introduces examples of good practices. It also provides information about asset recovery regimes in various financial centers.
“This study is a powerful tool to help policy makers design a comprehensive strategy for stolen asset recovery, and implement the necessary reforms,” said Jean Pesme, Manager of the World Bank’s Financial Market Integrity Programme and StAR Coordinator. “It can also aid practitioners by showing them how to use existing asset recovery tools more effectively
Balance of Payment deficit stands at Rs 11.67 billion
The deceleration in growth of trade deficit along with improvement in the service account has brought down the current account deficit pulling the overall Balance of Payment down to Rs 11.67 billion, according to the central bank.
"The overall BoP recorded a deficit of Rs 11.67 billion during the ten months of the current fiscal year compared to a deficit of Rs 14.03 billion in the same period last year," said the central bank's report today.
The current account deficit has come down by over a half to Rs 10.47 billion compared to a deficit of Rs 25.44 billion in the same period last year. "Still, the overall BoP position has not improved as expected," Nepal Rastra Bank said.
The Free-On-Board (FoB)-based merchandise trade deficit increased by 4.4 per cent to Rs 258.99 billion against a deficit that had grown by 50.2 per cent in the same period last year. The service account deficit declined considerably by 42.3 per cent to Rs 7.85 billion against its deficit that had increased by 69.3 per cent to Rs 13.6 billion in the same period last year.
Similarly, net transfer account registered a growth of 9.2 per cent to Rs 250.50 billion compared to that of a year ago. Under the transfers sub-group, grants decreased by 5.6 per cent to Rs 21.0 billion, while pension receipts rose by 3.7 per cent to Rs 23.44 billion. The workers' remittances increased by 10.8 per cent to Rs 206.66 billion compared to its growth of 10.2 per cent in the same period last year.
Likewise, under the financial account, foreign direct investment of Rs 5.74 billion was recorded compared to the level of Rs 2.41 billion in the same period a year ago, it added.
The Merchandise exports rose by 5.5 per cent to Rs 52.67 billion against a declined by 11.7 per cent to Rs 49.91 billion in the same period last year. Similarly, exports to India went up by 8.1 per cent in contrast to a drop of 7.3 per cent in the same period last year. Exports to other countries increased by 0.8 per cent against a decline of 18.9 per cent in the same period last year.
Similarly, merchandise imports increased by 4.8 per cent to Rs 321.0 billion, whereas imports from India soared by 23.9 percent compared to a growth of 34.7 per cent in the same period last year. Imports from other countries plummeted by 20.5 per cent against a growth of 33 per cent in the same period last year.
Total trade deficit went up by 4.6 per cent to Rs 268.14 billion, whereas trade deficit with India rose by 27.6 per cent compared to a growth of 50.4 per cent in the same period last year.On the contrary, trade deficit with other countries declined by 23.7 per cent compared to a growth of 47.3 per cent in the same period a year ago, it added.
Inflation at 9.5 per cent
KATHMANDU: The year-on-year inflation as measured by the consumer price index increased to 9.5 per cent in mid-May against 8.8 per cent in the same period last year. Of the items under food and beverage group, price index of vegetables sub-groups increased by the highest rate of 48.3 per cent compared to the decrease of 3.8 per cent in the same period last year.
Balance of Payment deficit continues
Mid-December -- Rs 3.35 billion
Mid-January -- Rs 4.43
Mid-February -- Rs 12.57 billion
Mid-March -- Rs 14.79 billion
mid-April -- Rs 11.67 billion
(Source: Central Bank)
"The overall BoP recorded a deficit of Rs 11.67 billion during the ten months of the current fiscal year compared to a deficit of Rs 14.03 billion in the same period last year," said the central bank's report today.
The current account deficit has come down by over a half to Rs 10.47 billion compared to a deficit of Rs 25.44 billion in the same period last year. "Still, the overall BoP position has not improved as expected," Nepal Rastra Bank said.
The Free-On-Board (FoB)-based merchandise trade deficit increased by 4.4 per cent to Rs 258.99 billion against a deficit that had grown by 50.2 per cent in the same period last year. The service account deficit declined considerably by 42.3 per cent to Rs 7.85 billion against its deficit that had increased by 69.3 per cent to Rs 13.6 billion in the same period last year.
Similarly, net transfer account registered a growth of 9.2 per cent to Rs 250.50 billion compared to that of a year ago. Under the transfers sub-group, grants decreased by 5.6 per cent to Rs 21.0 billion, while pension receipts rose by 3.7 per cent to Rs 23.44 billion. The workers' remittances increased by 10.8 per cent to Rs 206.66 billion compared to its growth of 10.2 per cent in the same period last year.
Likewise, under the financial account, foreign direct investment of Rs 5.74 billion was recorded compared to the level of Rs 2.41 billion in the same period a year ago, it added.
The Merchandise exports rose by 5.5 per cent to Rs 52.67 billion against a declined by 11.7 per cent to Rs 49.91 billion in the same period last year. Similarly, exports to India went up by 8.1 per cent in contrast to a drop of 7.3 per cent in the same period last year. Exports to other countries increased by 0.8 per cent against a decline of 18.9 per cent in the same period last year.
Similarly, merchandise imports increased by 4.8 per cent to Rs 321.0 billion, whereas imports from India soared by 23.9 percent compared to a growth of 34.7 per cent in the same period last year. Imports from other countries plummeted by 20.5 per cent against a growth of 33 per cent in the same period last year.
Total trade deficit went up by 4.6 per cent to Rs 268.14 billion, whereas trade deficit with India rose by 27.6 per cent compared to a growth of 50.4 per cent in the same period last year.On the contrary, trade deficit with other countries declined by 23.7 per cent compared to a growth of 47.3 per cent in the same period a year ago, it added.
Inflation at 9.5 per cent
KATHMANDU: The year-on-year inflation as measured by the consumer price index increased to 9.5 per cent in mid-May against 8.8 per cent in the same period last year. Of the items under food and beverage group, price index of vegetables sub-groups increased by the highest rate of 48.3 per cent compared to the decrease of 3.8 per cent in the same period last year.
Balance of Payment deficit continues
Mid-December -- Rs 3.35 billion
Mid-January -- Rs 4.43
Mid-February -- Rs 12.57 billion
Mid-March -- Rs 14.79 billion
mid-April -- Rs 11.67 billion
(Source: Central Bank)
Monday, June 20, 2011
Three financial institutions get special refinancing facility
The central bank has approved special refinancing facility to three financial institutions today.
"Of the total 22 financial institutions applied for the new refinancing facility from the central bank, the central bank today provided special refinancing facility to three financial institutions," said president of Nepal Finance Companies' Association Rajendra Man Shakya.
Due to acute cash shortage for the day-to-day transactions, the financial institutions have applied to the central bank for the special refinancing facility.
The central bank on June 9 has opened a 'special' refinancing window for banks and financial institutions under lender of the last resort to avert systemic risk from tight liquidity situation.
Though the central bank has been providing refinancing facility since April to boost investment on productive sectors, "the new move has increased amount to 60 per cent of the capital fund against the good loan at seven per cent interest rate for four months against good loans. But the central bank today increased the interest rates to 10 per cent.
However, Shakya opined that it is a short-term measure. "The problem has been pushed forward to four months away not solved," he said, adding that the central bank should bring a long term strategy to solve the crisis.Due to low depositors' confidence deposit mobilisation could not grow at the rate it used to grow in the past years, Shakya added. "Series of failures of financial institutions due to various reasons the depositors have lost their faith on development banks and finance companies."
The Parliamentary committee has also last week asked the central bank to prepare a work plan to avert the systemic crisis in case the current liquidity crunch prolongs.
The special refinancing facility has been opened only for those financial institutions affected with tight liquidity situation and the central bank will provide the facility only after going through their latest financials.Instead of relying on emergency bailout measures, the central bank has also suggested the financial institutions to mobilise more deposits and manage assets liability mismatch.
The central bank has also asked the financial institutions to help each other as there has been a huge mistrust due to recent failures of financial institutions. Those financial institutions, that have excess liquidity should help out others providing inter-bank lending," senior deputy governor of the central bank Gopal Kafle said, adding that trust deficit among the financial institutions have also enlarged the tight liquidity situation currently.
Investors' plea
KATHMANDU: Nepal Investors' Forum on Monday organising an interaction on capital market asked the government to revoke capital gain tax and implement transaction tax, differentiate capital gain tax on tax short-term selling and long-term guarantee buy back, relax loan against shares, start margin lending facility, start CDS immediately, make the capital market regulator Securities Board of Nepal (Sebon) autonomous, relax cross-holding for some time, and punish the person responsible for the bad governance instead of letting the financial institutions to go to bankruptcy to boost the morale of the investors.
"Of the total 22 financial institutions applied for the new refinancing facility from the central bank, the central bank today provided special refinancing facility to three financial institutions," said president of Nepal Finance Companies' Association Rajendra Man Shakya.
Due to acute cash shortage for the day-to-day transactions, the financial institutions have applied to the central bank for the special refinancing facility.
The central bank on June 9 has opened a 'special' refinancing window for banks and financial institutions under lender of the last resort to avert systemic risk from tight liquidity situation.
Though the central bank has been providing refinancing facility since April to boost investment on productive sectors, "the new move has increased amount to 60 per cent of the capital fund against the good loan at seven per cent interest rate for four months against good loans. But the central bank today increased the interest rates to 10 per cent.
However, Shakya opined that it is a short-term measure. "The problem has been pushed forward to four months away not solved," he said, adding that the central bank should bring a long term strategy to solve the crisis.Due to low depositors' confidence deposit mobilisation could not grow at the rate it used to grow in the past years, Shakya added. "Series of failures of financial institutions due to various reasons the depositors have lost their faith on development banks and finance companies."
The Parliamentary committee has also last week asked the central bank to prepare a work plan to avert the systemic crisis in case the current liquidity crunch prolongs.
The special refinancing facility has been opened only for those financial institutions affected with tight liquidity situation and the central bank will provide the facility only after going through their latest financials.Instead of relying on emergency bailout measures, the central bank has also suggested the financial institutions to mobilise more deposits and manage assets liability mismatch.
The central bank has also asked the financial institutions to help each other as there has been a huge mistrust due to recent failures of financial institutions. Those financial institutions, that have excess liquidity should help out others providing inter-bank lending," senior deputy governor of the central bank Gopal Kafle said, adding that trust deficit among the financial institutions have also enlarged the tight liquidity situation currently.
Investors' plea
KATHMANDU: Nepal Investors' Forum on Monday organising an interaction on capital market asked the government to revoke capital gain tax and implement transaction tax, differentiate capital gain tax on tax short-term selling and long-term guarantee buy back, relax loan against shares, start margin lending facility, start CDS immediately, make the capital market regulator Securities Board of Nepal (Sebon) autonomous, relax cross-holding for some time, and punish the person responsible for the bad governance instead of letting the financial institutions to go to bankruptcy to boost the morale of the investors.
Sunday, June 19, 2011
House might ratify UN Conventions on June 22 to save country from being blacklisted
The Legislature Parliament is likely to ratify two key UN Conventions on June
22.
Though one -- UN Convention on Suppression of Terrorism Financing -- was rescheduled to be ratified today, the parliament has rescheduled the date after disturbances in the house proceedings.
UN Convention on Suppression of Terrorism Financing and UN Convention Against Transnational Organised Crime are key conventions for Nepal to ratify not to be black listed.
Nepal will be presenting its progress report to the plenary sessions of joint Financial Action Task Force during the meeting on June 20-24.
However, central bank governor Dr Yubraj Khatiwada and law secretary Madhav Poudel left for Mexico yesterday to take part in the plenary sessions of joint Financial Action Task Force -- a global anti-money laundering agency -- working committee meeting.
Khatiwada will appraise International Cooperation Review Group undear FATF on Nepal's progress on June 20-21. Similarly, on June 22-24, the 35 member states of FATF will discuss on progress on Anti-Money Laundering in their respective countries.
Earlier, the intra-party feud in the UCPN-Maoist has delayed the ratification of the UN Conventions.
Finance Ministry registered both the convention at the parliamentary secretariat after Home Minister Krishna Bahadur Mahara refused to register UN Convention Against Transnational Organised Crime due to increasing pressure within his own party.
A country has to fulfil 40 plus nine special recommendations of Financial Action Task Force to comply with the international Anti-Money Laundering practice.
Its purpose is to ensure the adoption, implementation and enforcement of internationally accepted anti-money laundering and counter-terrorist financing standards.
Nepal has recently ratified UN Convention on combating corruption, amended Anti-Money Laundering Act and approved a separate department to look after Anti-Money Laundering but still has left 36 recommendations untouched.
If Nepal ratifies UN Conventions against Organised Financial Crime and UN Convention Against Transnational Organised Crime and two bills – Mutual Legal Assistance Bill and Extradition Bill -- before governor's presentation, there is still a chance of escaping the black listing.
Earlier, the regional review meeting of FATF in Macau on May 13 had asked Nepal to submit the progress report by June 21 before its plenary takes place on June 20-24 in Mexico. Nepal had in the Macau meeting also requested for deadline extension to meet the requirements as the country is passing through transitional period.
The FATF has forty plus nine special recommendations for the countries to comply not to be black listed.
Of them, the nine special recommendations formed to check terrorist financing include ratification and implementation of UN instruments, criminalising the financing of terrorism and associated money laundering, freezing and confiscating terrorist assets, reporting suspicious transactions related to terrorism, building international cooperation, check alternative remittance, wire transfer, monitor NGOs and cash couriers to check flow of dirty money.
The convention
KATHMANDU: According to United Nations 1999 International Convention for the Suppression of the Financing of Terrorism, "If a person by any means, directly or indirectly, unlawfully and wilfully, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out an act which constitutes an offence within the scope of and as defined in one of the treaties listed in the convention; any other act intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organisation to do or to abstain from doing any act."
22.
Though one -- UN Convention on Suppression of Terrorism Financing -- was rescheduled to be ratified today, the parliament has rescheduled the date after disturbances in the house proceedings.
UN Convention on Suppression of Terrorism Financing and UN Convention Against Transnational Organised Crime are key conventions for Nepal to ratify not to be black listed.
Nepal will be presenting its progress report to the plenary sessions of joint Financial Action Task Force during the meeting on June 20-24.
However, central bank governor Dr Yubraj Khatiwada and law secretary Madhav Poudel left for Mexico yesterday to take part in the plenary sessions of joint Financial Action Task Force -- a global anti-money laundering agency -- working committee meeting.
Khatiwada will appraise International Cooperation Review Group undear FATF on Nepal's progress on June 20-21. Similarly, on June 22-24, the 35 member states of FATF will discuss on progress on Anti-Money Laundering in their respective countries.
Earlier, the intra-party feud in the UCPN-Maoist has delayed the ratification of the UN Conventions.
Finance Ministry registered both the convention at the parliamentary secretariat after Home Minister Krishna Bahadur Mahara refused to register UN Convention Against Transnational Organised Crime due to increasing pressure within his own party.
A country has to fulfil 40 plus nine special recommendations of Financial Action Task Force to comply with the international Anti-Money Laundering practice.
Its purpose is to ensure the adoption, implementation and enforcement of internationally accepted anti-money laundering and counter-terrorist financing standards.
Nepal has recently ratified UN Convention on combating corruption, amended Anti-Money Laundering Act and approved a separate department to look after Anti-Money Laundering but still has left 36 recommendations untouched.
If Nepal ratifies UN Conventions against Organised Financial Crime and UN Convention Against Transnational Organised Crime and two bills – Mutual Legal Assistance Bill and Extradition Bill -- before governor's presentation, there is still a chance of escaping the black listing.
Earlier, the regional review meeting of FATF in Macau on May 13 had asked Nepal to submit the progress report by June 21 before its plenary takes place on June 20-24 in Mexico. Nepal had in the Macau meeting also requested for deadline extension to meet the requirements as the country is passing through transitional period.
The FATF has forty plus nine special recommendations for the countries to comply not to be black listed.
Of them, the nine special recommendations formed to check terrorist financing include ratification and implementation of UN instruments, criminalising the financing of terrorism and associated money laundering, freezing and confiscating terrorist assets, reporting suspicious transactions related to terrorism, building international cooperation, check alternative remittance, wire transfer, monitor NGOs and cash couriers to check flow of dirty money.
The convention
KATHMANDU: According to United Nations 1999 International Convention for the Suppression of the Financing of Terrorism, "If a person by any means, directly or indirectly, unlawfully and wilfully, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out an act which constitutes an offence within the scope of and as defined in one of the treaties listed in the convention; any other act intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organisation to do or to abstain from doing any act."
Government to talk to Nepali Congress on budget
Chief whips of the political parties in the government agreed to hold discussion on pre budget from the mid-June in the Legislature-Parliament.
According to chief whip of ruling CPN-UML Bhim Acharya, they have agreed to hold discussions with the main opposition party Nepali Congress on the budget for the fiscal year 2011-12.
At a meeting called by the deputy prime minister and Finance Ministry Bharat Mohan Adhikari, they also expressed the urgency on budget.
"The budget should be brought in time," Acharya said, adding that the delay in budget would affect the nation's financial and developmental activities.
Since the last three years, the successive governments have failed to present the budget on time creating a policy dilemma and confusion in the private sector.
"The government should take main opposition Nepali Congress and other parties in confidence to prepare budget, he added.
The UCPN-Maoists and CPN-UML are for bringing the budget for the new fiscal year saying the new government has not yet been formed.
Though Nepali Congress is also in favour of bringing the budget within July 16 but if possible the new government should bring the budget, according to Nepali Congress. "The budget could not be presented sidelining Nepali Congress," said the party.
The chief whip of Nepali Congress Laxman Ghimire, said that his party is ready to discuss on budget once the top leaders of major parties forge consensus over the budget.
Meanwhile, Transparency International Nepal today wrote Prime Minister Jhala Nath Khanal asking him not to breach existing Constitution by transferring budget from one project to another rampantly.
In its letter, Transparency International has reminded different clauses of the Constitution to the Prime Minister and asked him to abide by the Constitution of the land.
It has also criticised the government’s trend of transferring budget from one project to another without much study, analysis and estimation. "The Finance Ministry has started wrong tradition by transferring budget which is unconstitutional," the Transparency International Nepal said, blaming the ministry for playing foul.
After receiving complaints of misusing government coffer by transferring budget rampantly, Public Accounts Committee under Legislature Parliament had also on June 7 asked the Finance Ministry not to transfer budgets from one heading to another except for priority (P1) projects and natural calamity.
Similarly, Commission for the Investigation of Abuse of Authority (CIAA) has on June 13 directed the government not to transfer budget to the projects which are not listed under national priority.
According to chief whip of ruling CPN-UML Bhim Acharya, they have agreed to hold discussions with the main opposition party Nepali Congress on the budget for the fiscal year 2011-12.
At a meeting called by the deputy prime minister and Finance Ministry Bharat Mohan Adhikari, they also expressed the urgency on budget.
"The budget should be brought in time," Acharya said, adding that the delay in budget would affect the nation's financial and developmental activities.
Since the last three years, the successive governments have failed to present the budget on time creating a policy dilemma and confusion in the private sector.
"The government should take main opposition Nepali Congress and other parties in confidence to prepare budget, he added.
The UCPN-Maoists and CPN-UML are for bringing the budget for the new fiscal year saying the new government has not yet been formed.
Though Nepali Congress is also in favour of bringing the budget within July 16 but if possible the new government should bring the budget, according to Nepali Congress. "The budget could not be presented sidelining Nepali Congress," said the party.
The chief whip of Nepali Congress Laxman Ghimire, said that his party is ready to discuss on budget once the top leaders of major parties forge consensus over the budget.
Meanwhile, Transparency International Nepal today wrote Prime Minister Jhala Nath Khanal asking him not to breach existing Constitution by transferring budget from one project to another rampantly.
In its letter, Transparency International has reminded different clauses of the Constitution to the Prime Minister and asked him to abide by the Constitution of the land.
It has also criticised the government’s trend of transferring budget from one project to another without much study, analysis and estimation. "The Finance Ministry has started wrong tradition by transferring budget which is unconstitutional," the Transparency International Nepal said, blaming the ministry for playing foul.
After receiving complaints of misusing government coffer by transferring budget rampantly, Public Accounts Committee under Legislature Parliament had also on June 7 asked the Finance Ministry not to transfer budgets from one heading to another except for priority (P1) projects and natural calamity.
Similarly, Commission for the Investigation of Abuse of Authority (CIAA) has on June 13 directed the government not to transfer budget to the projects which are not listed under national priority.
Saturday, June 18, 2011
Secondary market bounces back to float above 300 points
The secondary market bounced back to close at 303.53 points from the six year low of 292.32 points this week. However, it shed 5.35 points from Sunday morning’s opening of 308.88 points.
The central bank’s mood to relax loan against shares and some institutional investors’ active participation in the secondary market might have boosted the investor’s confidence that has been at a low recently.
Citizen Investment Trust has started buying and Beema Sansthan is planning according to the direction of finance ministry.
The secondary market witnessed more than half — some 120 companies — of the total 204 listed companies’ shares being traded this week despite shares prices being dropped significantly.
The market experts, however, suggested the investors’ not to panic and sell but start buying the shares of companies that have return more than the current interest rate, has been distributing dividends since last couples of years and of course has a good governance.
Of the total transaction, the Class A companies that are considered good investment saw 67.33 per cent transaction at Rs 68.2 million. The week observed a total of Rs 134.84 million transaction in the regular five day session. Of the nine sub groups, only two — manufacturing and others’ subgroups — gained, whereas seven sub groups lost this week, that witnessed Bank of Kathmandu with Rs 13.58 million as the highest traded company in terms of transaction amount followed by Chilime Hydro with Rs 11.63 million, Standard Chartered Bank Nepal with Rs 9.02 million, Nabil Bank with Rs 7.78 million and Nepal Telecom with Rs 5.95 million.
In terms of number of shares being traded also Bank of Kathmandu topped the chart with its 35,036 unit of shares changing hands, whereas in terms of number of transaction, Valley Finance topped the chart.
The Nepse
Last Thursday -- 308.88 points
Sunday -- 304.1 points
Monday -- 301.7 points
Tuesday -- 297.63 points
Wednesday -- 292.32 points
Thursday -- 303.53 points
The central bank’s mood to relax loan against shares and some institutional investors’ active participation in the secondary market might have boosted the investor’s confidence that has been at a low recently.
Citizen Investment Trust has started buying and Beema Sansthan is planning according to the direction of finance ministry.
The secondary market witnessed more than half — some 120 companies — of the total 204 listed companies’ shares being traded this week despite shares prices being dropped significantly.
The market experts, however, suggested the investors’ not to panic and sell but start buying the shares of companies that have return more than the current interest rate, has been distributing dividends since last couples of years and of course has a good governance.
Of the total transaction, the Class A companies that are considered good investment saw 67.33 per cent transaction at Rs 68.2 million. The week observed a total of Rs 134.84 million transaction in the regular five day session. Of the nine sub groups, only two — manufacturing and others’ subgroups — gained, whereas seven sub groups lost this week, that witnessed Bank of Kathmandu with Rs 13.58 million as the highest traded company in terms of transaction amount followed by Chilime Hydro with Rs 11.63 million, Standard Chartered Bank Nepal with Rs 9.02 million, Nabil Bank with Rs 7.78 million and Nepal Telecom with Rs 5.95 million.
In terms of number of shares being traded also Bank of Kathmandu topped the chart with its 35,036 unit of shares changing hands, whereas in terms of number of transaction, Valley Finance topped the chart.
The Nepse
Last Thursday -- 308.88 points
Sunday -- 304.1 points
Monday -- 301.7 points
Tuesday -- 297.63 points
Wednesday -- 292.32 points
Thursday -- 303.53 points
Food security situation remains stable
The food security situation across most of the country remained stable between January and March due to a good summer crop harvest that took place mostly in October-December 2010, according to a report.
However, in some localised areas where the summer crop was impaired, the situation has deteriorated, said the monthly report prepared byWorld Food Programme (WFP) but currently being institutionalised by Ministry of Agriculture and Cooperatives and National Planning Commission.
Far Western Hill and Mountain districts were particularly affected by crop losses and multiple districts are experiencing a high level of food insecurity.
"Surkhet, Dailekh, Doti, Dadeldhura and Bajura are of particular concern, where multiple VDCs experienced average summer crop losses that exceeded 30 per cent due to late and insufficient rainfall and in some areas hailstorm damage," it said, adding that Nepal Food Security Monitoring System District Food Security Networks identified some 45 VDCs that are 'highly food insecure', where people are coping by consuming less preferred food, reducing the size of meals and selling household assets as the household food stock is sufficient for one to two months only, and local employment opportunities have generally decreased by 10-30 per cent.
In the Karnali region, the WFP food assistance has stabilised the food security situation, it claimed, adding, "due to WFP’s food assistance and the work of other development agencies, household food stock has recovered and for most households should last until the winter harvest."
However, it has showed serious concern over rising food prices.
According to Nepal Rastra Bank, the consumer price index increased by 11.3 per cent -- in mid-January 2011 compared to the 10.7 per cent in mid-January a year ago -- largely driven by the food and beverage price index that rose by 17.6 per cent.
The Nepal Food Security Monitoring System collects, analyses and presents information on household food security, emerging crises, markets and nutrition from across Nepal.
Similarly, District Food Security Networks in each district of the country validate, exchange and generate up-to-date food security information.
These networks prepare quarterly District Food Security Bulletins, food security phase classification maps and provide an food security outlook based on the latest information locally available.
However, in some localised areas where the summer crop was impaired, the situation has deteriorated, said the monthly report prepared byWorld Food Programme (WFP) but currently being institutionalised by Ministry of Agriculture and Cooperatives and National Planning Commission.
Far Western Hill and Mountain districts were particularly affected by crop losses and multiple districts are experiencing a high level of food insecurity.
"Surkhet, Dailekh, Doti, Dadeldhura and Bajura are of particular concern, where multiple VDCs experienced average summer crop losses that exceeded 30 per cent due to late and insufficient rainfall and in some areas hailstorm damage," it said, adding that Nepal Food Security Monitoring System District Food Security Networks identified some 45 VDCs that are 'highly food insecure', where people are coping by consuming less preferred food, reducing the size of meals and selling household assets as the household food stock is sufficient for one to two months only, and local employment opportunities have generally decreased by 10-30 per cent.
In the Karnali region, the WFP food assistance has stabilised the food security situation, it claimed, adding, "due to WFP’s food assistance and the work of other development agencies, household food stock has recovered and for most households should last until the winter harvest."
However, it has showed serious concern over rising food prices.
According to Nepal Rastra Bank, the consumer price index increased by 11.3 per cent -- in mid-January 2011 compared to the 10.7 per cent in mid-January a year ago -- largely driven by the food and beverage price index that rose by 17.6 per cent.
The Nepal Food Security Monitoring System collects, analyses and presents information on household food security, emerging crises, markets and nutrition from across Nepal.
Similarly, District Food Security Networks in each district of the country validate, exchange and generate up-to-date food security information.
These networks prepare quarterly District Food Security Bulletins, food security phase classification maps and provide an food security outlook based on the latest information locally available.
Friday, June 17, 2011
Intra-party feud in UCPN-Maoists may bring shame to country
The intra-party feud in UCPN-Maoist might create rather a unpleasent situation for Nepal.
Home Minister Krishna Bahadur Mahara today refused to register UN Convention Against Transnational Organised Crime at the Parliamentary secretariate due to increasing pressure within his own party.
However, finance ministry has registered another crucial UN Convention on Suppression of Financing of Terrorism at the secretariate.
"Most probably, UN Convention on Suppression of Financing of Terrorism will be ratified on Sunday," said finance secretary Krishna Hari Baskota.
Had the UN Convention Against Transnational Organised Crime registered today, both would have been passed on Sunday lessening the chance of country being blacklisted by Financial Action Task Force.
"We are studying the Convention and would be registered at the secretariate only after completely assessing its possible consequences,” vice-chairman of Unified CPN Maoist Narayan Kaji Shrestha, said, adding that the party was also assessing the provisions of reservations in the convention.
However, standing committee member Dev Prasad Gurung claimed that Nepal does not need to ratify it because it was not necessary for the country and its people. "Since we don’t have any problem of terrorism like Al Qaeda, we don’t need to ratify such convention,” he said, adding that ratifying such a convention could weaken our national security.
Gurung, however, said the issue was not raised in the party committees.
"Though Mahara has prepared to register the extradition bill in the house today, it has been rejected at the last minute,” said UCPN-Maoists secretary CP Gajurel.
According to a source at the Home Minister that was about to register it today, the ministry kept the parliamentary officials waiting till late hours, but informed them in the evening that they are not registering it today.
However, sources claimed that Mahara is taking a rather unusual route of registering it. "Another minister might register it as it is key to fulfill Financial Action Task Force's recommendation to save the country from being black listed," the source added.
A country has to fulfill 40 plus nine recommendations of Financial Action Task Force -- a global anti-money laundering agency -- to comply with the international Anti-Money Laundering practice.
Its purpose is to ensure the adoption, implementation and enforcement of internationally accepted anti-money laundering and counter-terrorist financing standards set out in the Financial Action Task Force's 40 plus nine special recommendations.
"Nepal has recently ratified UN Convention on combating corruption, amended Anti-Money Laundering Act and approved a separate department to look after Anti-Money Laundering," Baskota said, adding that it has still not escaped the possibility of black listing. "We still have to take stock of 36 recommendations."
If Nepal ratifies two UN Convetions -- UN Conventions against Organised Financial Crime and UN Convention Against Transnational Organised Crime -- and two bills – Mutual Legal Assistance Bill and Extradition Bill -- by June 21, there is still a chance of escaping the black listing.
The pleneray meeting of Financial Action Task Force in Mexico on June 20-24 will go through Nepal's progress and decide on Nepal's fate.
The central bank governor, and secretary at the Law Ministry wil be going to Mexico to appraise of the latest development of the country," Baskota added.
Earleir, the regional review meeting of FATF in Macau on May 13 had asked Nepal to submit the progress report by June 21 before its plenary takes place on June 20-24 in Mexico.
Nepal had in the Macau meeting also requested for deadline extension to meet the requirements as the country is passing through transitional period.
Home Minister Krishna Bahadur Mahara today refused to register UN Convention Against Transnational Organised Crime at the Parliamentary secretariate due to increasing pressure within his own party.
However, finance ministry has registered another crucial UN Convention on Suppression of Financing of Terrorism at the secretariate.
"Most probably, UN Convention on Suppression of Financing of Terrorism will be ratified on Sunday," said finance secretary Krishna Hari Baskota.
Had the UN Convention Against Transnational Organised Crime registered today, both would have been passed on Sunday lessening the chance of country being blacklisted by Financial Action Task Force.
"We are studying the Convention and would be registered at the secretariate only after completely assessing its possible consequences,” vice-chairman of Unified CPN Maoist Narayan Kaji Shrestha, said, adding that the party was also assessing the provisions of reservations in the convention.
However, standing committee member Dev Prasad Gurung claimed that Nepal does not need to ratify it because it was not necessary for the country and its people. "Since we don’t have any problem of terrorism like Al Qaeda, we don’t need to ratify such convention,” he said, adding that ratifying such a convention could weaken our national security.
Gurung, however, said the issue was not raised in the party committees.
"Though Mahara has prepared to register the extradition bill in the house today, it has been rejected at the last minute,” said UCPN-Maoists secretary CP Gajurel.
According to a source at the Home Minister that was about to register it today, the ministry kept the parliamentary officials waiting till late hours, but informed them in the evening that they are not registering it today.
However, sources claimed that Mahara is taking a rather unusual route of registering it. "Another minister might register it as it is key to fulfill Financial Action Task Force's recommendation to save the country from being black listed," the source added.
A country has to fulfill 40 plus nine recommendations of Financial Action Task Force -- a global anti-money laundering agency -- to comply with the international Anti-Money Laundering practice.
Its purpose is to ensure the adoption, implementation and enforcement of internationally accepted anti-money laundering and counter-terrorist financing standards set out in the Financial Action Task Force's 40 plus nine special recommendations.
"Nepal has recently ratified UN Convention on combating corruption, amended Anti-Money Laundering Act and approved a separate department to look after Anti-Money Laundering," Baskota said, adding that it has still not escaped the possibility of black listing. "We still have to take stock of 36 recommendations."
If Nepal ratifies two UN Convetions -- UN Conventions against Organised Financial Crime and UN Convention Against Transnational Organised Crime -- and two bills – Mutual Legal Assistance Bill and Extradition Bill -- by June 21, there is still a chance of escaping the black listing.
The pleneray meeting of Financial Action Task Force in Mexico on June 20-24 will go through Nepal's progress and decide on Nepal's fate.
The central bank governor, and secretary at the Law Ministry wil be going to Mexico to appraise of the latest development of the country," Baskota added.
Earleir, the regional review meeting of FATF in Macau on May 13 had asked Nepal to submit the progress report by June 21 before its plenary takes place on June 20-24 in Mexico.
Nepal had in the Macau meeting also requested for deadline extension to meet the requirements as the country is passing through transitional period.
Urge to prioritise poverty, inclusive growth
Poverty and inclusive growth should be given high priority, according to a high level government official.
"Poverty and inclusive growth policies should be accorded highest priority and considered as top national agenda," said chief secretary Madhav Ghimire at the concluding ceremony of high level joint learning event on Pro Poor Growth, organised jointly by National Planning Commission, Ministry of Local Development, German Development Cooperation (GIZ) and Poverty Alleviation Fund here on Friday.
He also stressed the need of capacitating communities and local bodies to increase their access to the services of governmental and non-governmental sectors and to manage the development initiatives at the local level.
On the occasion, secretary of National Planning Commission Yub Raj Bhusal highlighted the need of targeted and fast-track programmes to have quick results to decrease gaps between the rich and the poor.
"Investment on human capital and broad-based economic sector pave ways for creating jobs and establish linkages among different sectoral approaches," he added.
"Pro poor policies should be implementable and its impacts need to be visible at the local levels," suggested secretary of Ministry of Local Development Sushil Ghimire.
Similarly, Dr Horst Matthaeus from GIZ said that a political economic analysis is not systematically used in formulating public policies. He also suggested the tool specifically be used in pro poor growth policies in Nepal.
Executive Director of the Fund Raj Babu Shrestha, on the occasion, said that outcomes of the joint learning event would be circulated and shared with top policy makers to promote dialogue and integrated to the national level policy-making.
The learning event was delivered and designed by the UK based Overseas Development Institute in association with another UK based consulting company ITAD Ltd.
The three-day event that had a high level representatives from the government, development partners, academia and civil society, and community members concluded today with five key recommendations.
The meeting hoped that such analysis would serve with a number of recommendations for the government to conduct policy audit and analysis of drivers for pro poor growth.
The high level joint learning event also recommended the government to conduct policy audit and analysis of drivers for pro poor growth, include more rigorous political economy analysis of programs and projects, emphasis on deteriorating urban poverty and comprehensive sector analysis vis-à-vis pro-poor growth.
While there was appreciation of increasing voice of rural poor in planning, the participants encouraged government to make similar efforts to engage the urban poor.
The five-point recommendations
* Conduct a policy audit of the extent to which current policies favor the poor.
* Analyse drivers of pro-poor growth in Nepal.
* Develop agriculture, but support the rural poor to take up non-farm jobs, including through migration to urban areas.
* Hold public hearings in the regions on proposed policies before promulgation.
* Development partners should help develop capacity of government and non-state actors to plan, implement and monitor pro-poor growth.
"Poverty and inclusive growth policies should be accorded highest priority and considered as top national agenda," said chief secretary Madhav Ghimire at the concluding ceremony of high level joint learning event on Pro Poor Growth, organised jointly by National Planning Commission, Ministry of Local Development, German Development Cooperation (GIZ) and Poverty Alleviation Fund here on Friday.
He also stressed the need of capacitating communities and local bodies to increase their access to the services of governmental and non-governmental sectors and to manage the development initiatives at the local level.
On the occasion, secretary of National Planning Commission Yub Raj Bhusal highlighted the need of targeted and fast-track programmes to have quick results to decrease gaps between the rich and the poor.
"Investment on human capital and broad-based economic sector pave ways for creating jobs and establish linkages among different sectoral approaches," he added.
"Pro poor policies should be implementable and its impacts need to be visible at the local levels," suggested secretary of Ministry of Local Development Sushil Ghimire.
Similarly, Dr Horst Matthaeus from GIZ said that a political economic analysis is not systematically used in formulating public policies. He also suggested the tool specifically be used in pro poor growth policies in Nepal.
Executive Director of the Fund Raj Babu Shrestha, on the occasion, said that outcomes of the joint learning event would be circulated and shared with top policy makers to promote dialogue and integrated to the national level policy-making.
The learning event was delivered and designed by the UK based Overseas Development Institute in association with another UK based consulting company ITAD Ltd.
The three-day event that had a high level representatives from the government, development partners, academia and civil society, and community members concluded today with five key recommendations.
The meeting hoped that such analysis would serve with a number of recommendations for the government to conduct policy audit and analysis of drivers for pro poor growth.
The high level joint learning event also recommended the government to conduct policy audit and analysis of drivers for pro poor growth, include more rigorous political economy analysis of programs and projects, emphasis on deteriorating urban poverty and comprehensive sector analysis vis-à-vis pro-poor growth.
While there was appreciation of increasing voice of rural poor in planning, the participants encouraged government to make similar efforts to engage the urban poor.
The five-point recommendations
* Conduct a policy audit of the extent to which current policies favor the poor.
* Analyse drivers of pro-poor growth in Nepal.
* Develop agriculture, but support the rural poor to take up non-farm jobs, including through migration to urban areas.
* Hold public hearings in the regions on proposed policies before promulgation.
* Development partners should help develop capacity of government and non-state actors to plan, implement and monitor pro-poor growth.
Thursday, June 16, 2011
Repo, refinancing and resurrection of financial institutions
* Central bank on Wednesday issued Rs 6 billion worth repo but financial institutions absorbed only Rs 2.5 billion.
* Some financial institutions have applied to the central bank for refinancing.
* Central bank governor himself requested banks and financial institutions to help each other by providing inter bank lending as there seems to be trust deficit among themselves.
* Finance Ministry is positive on parking government's unspent money in Rastriya Banijya Bank instead of keeping it in central bank's vault.
Central bank and government both 'seem' to be serious due to current crisis, though central bank governor Dr Yubraj Khatiwada doesnot agree that financial system has any problem. "Some financial institutions are in problem," he has said, however, added that the central bank is also ready to help financial institutions to come out of the current problem in any way they want. But he still has doubt, "what if the financial institutions donot correct themselves and current crisis expands."
Apart from refinancing measures to financial institutions to create a more breathing space and twice a week repo to inject liquidity in the banking system, the central bank is realxing loan against share, and real estate and housing loan to help clean financial institutions' balance sheet by the end of the fiscal year that is less than a month now.
"However, repo and refinancing are the short-term measures," according to Nepali Congress leader and former finance minister Dr Ram Sharan Mahat.
"The central bank must bring a long term strategy," he said, adding that the short term measures will only help subside the problem but not solve the liquidity crunch as the informal sector has been balloning in recent years.
However, entrepreneurs think the current liquidity crunch is only the tip of iceberg and the whole economy is reeling under a crisis.
"The liquidity crunch is a part of whole economic mismanagement," according to Constituent Assembly (CA) member and entrepreneur Binod Chaudhary. "Since last three years, the country is passing through planned attack on investors and discouraging tax payers," he said, adding that the sector that can inject liquidity in the market is haunted by the government.
The indicators, according to him, are painting a gloomy picture of economy.
The secondary market index has plunged below 300 points to six year low, economic growth is at 3.42 per cent, balance of payment is at Rs 14.79 billion deficit, imports exceeds six times the exports. "By the first nine months of current fiscal year, merchandise exports recorded Rs 47.98 billion but merchandise exports stood at Rs 288.06 billion," according to the central bank data. "Inflation is at double digit since last three years."
The government has neither been able to mobilise domestic nor foreign aid resources to generate economic activities in the country, Chaudhary added.
"Had the government been able to mobilise foreign aid and expedite development spending, more liquidity would have been injected in the system," he said, lamenting the government's inability to mobilise foreign aid.
Nepal had received almost double to Rs 92,288.48 million foreign aid commitment -- including loan and grants from bilateral and multilateral agencies -- in the fiscal year 2009-10, However, political tug of war has slowed down the development activities making the government unable to mobilise the foreign aid commitment.
Similarly, from the domestic resources, the government has around Rs 13 billion in its coffer.
"Out of the total accumulated fund in the government coffer, some Rs 10 billion has to be pumped into the market to generate economic activities that can resurrect not only financial institutions but also lubricate economic cycle that has been jammed," according to another CA member and entrepreneur Rajendra Kumar Khetan.
* Some financial institutions have applied to the central bank for refinancing.
* Central bank governor himself requested banks and financial institutions to help each other by providing inter bank lending as there seems to be trust deficit among themselves.
* Finance Ministry is positive on parking government's unspent money in Rastriya Banijya Bank instead of keeping it in central bank's vault.
Central bank and government both 'seem' to be serious due to current crisis, though central bank governor Dr Yubraj Khatiwada doesnot agree that financial system has any problem. "Some financial institutions are in problem," he has said, however, added that the central bank is also ready to help financial institutions to come out of the current problem in any way they want. But he still has doubt, "what if the financial institutions donot correct themselves and current crisis expands."
Apart from refinancing measures to financial institutions to create a more breathing space and twice a week repo to inject liquidity in the banking system, the central bank is realxing loan against share, and real estate and housing loan to help clean financial institutions' balance sheet by the end of the fiscal year that is less than a month now.
"However, repo and refinancing are the short-term measures," according to Nepali Congress leader and former finance minister Dr Ram Sharan Mahat.
"The central bank must bring a long term strategy," he said, adding that the short term measures will only help subside the problem but not solve the liquidity crunch as the informal sector has been balloning in recent years.
However, entrepreneurs think the current liquidity crunch is only the tip of iceberg and the whole economy is reeling under a crisis.
"The liquidity crunch is a part of whole economic mismanagement," according to Constituent Assembly (CA) member and entrepreneur Binod Chaudhary. "Since last three years, the country is passing through planned attack on investors and discouraging tax payers," he said, adding that the sector that can inject liquidity in the market is haunted by the government.
The indicators, according to him, are painting a gloomy picture of economy.
The secondary market index has plunged below 300 points to six year low, economic growth is at 3.42 per cent, balance of payment is at Rs 14.79 billion deficit, imports exceeds six times the exports. "By the first nine months of current fiscal year, merchandise exports recorded Rs 47.98 billion but merchandise exports stood at Rs 288.06 billion," according to the central bank data. "Inflation is at double digit since last three years."
The government has neither been able to mobilise domestic nor foreign aid resources to generate economic activities in the country, Chaudhary added.
"Had the government been able to mobilise foreign aid and expedite development spending, more liquidity would have been injected in the system," he said, lamenting the government's inability to mobilise foreign aid.
Nepal had received almost double to Rs 92,288.48 million foreign aid commitment -- including loan and grants from bilateral and multilateral agencies -- in the fiscal year 2009-10, However, political tug of war has slowed down the development activities making the government unable to mobilise the foreign aid commitment.
Similarly, from the domestic resources, the government has around Rs 13 billion in its coffer.
"Out of the total accumulated fund in the government coffer, some Rs 10 billion has to be pumped into the market to generate economic activities that can resurrect not only financial institutions but also lubricate economic cycle that has been jammed," according to another CA member and entrepreneur Rajendra Kumar Khetan.
IndiGo plans Kathmandu-Delhi flight from August 4
Fares on the New Delhi- Kathmandu flight are poised to dip to as low as Rs 5,000, to the joy of budget travellers, as India's low-cost carrier IndiGo readies to start operations to Kathmandu with seven trips a week from August 4.
The Gurgaon-based India's domestic airline, which announced it would go international from September with flights to Dubai, Singapore and Bangkok, can actually debut with Kathmandu in August, if Ministry of Tourism and Civil Aviation gives it a green signal.
President International -- IndiGo's general sales agent in Nepal -- said Indian civil aviation authorities have cleared the New Delhi-Kathmandu flight. Civil Aviation Authority of Nepal will give final permission after the ministry gives it a go ahead.
With Nepal celebrating 2011 as tourism year with a target of drawing one million air-borne tourists, President International said it would like to see the New Delhi-Kathmandu flight kick off from August 4.
The flight will see brand new 180-seater Airbus 320s with emphasis on low fares.
Currently, Jet Airways and Air India fly between the two capitals of South Asian neighbours along with other Indian budget carriers JetLite and Spicejet.
The one-way fare on budget airlines will come to as low as Rs 5,000, though there is no official announcement about IndiGo's fare structure.
"Hotels in Kathmandu and other packages are extremely competitive," according to Sharad Pradhan of Nepal Tourism Board. "But the high fare puts off travellers," he said, adding that fares from India to other countries like Thailand, Singapore and Malaysia are far cheaper compared to flights to Kathmandu.
Earlier, domestic budget carrier Cosmic Air started the price war selling lower priced tickets on the route but cvould not survive due to high operation cost.
The Gurgaon-based India's domestic airline, which announced it would go international from September with flights to Dubai, Singapore and Bangkok, can actually debut with Kathmandu in August, if Ministry of Tourism and Civil Aviation gives it a green signal.
President International -- IndiGo's general sales agent in Nepal -- said Indian civil aviation authorities have cleared the New Delhi-Kathmandu flight. Civil Aviation Authority of Nepal will give final permission after the ministry gives it a go ahead.
With Nepal celebrating 2011 as tourism year with a target of drawing one million air-borne tourists, President International said it would like to see the New Delhi-Kathmandu flight kick off from August 4.
The flight will see brand new 180-seater Airbus 320s with emphasis on low fares.
Currently, Jet Airways and Air India fly between the two capitals of South Asian neighbours along with other Indian budget carriers JetLite and Spicejet.
The one-way fare on budget airlines will come to as low as Rs 5,000, though there is no official announcement about IndiGo's fare structure.
"Hotels in Kathmandu and other packages are extremely competitive," according to Sharad Pradhan of Nepal Tourism Board. "But the high fare puts off travellers," he said, adding that fares from India to other countries like Thailand, Singapore and Malaysia are far cheaper compared to flights to Kathmandu.
Earlier, domestic budget carrier Cosmic Air started the price war selling lower priced tickets on the route but cvould not survive due to high operation cost.
Wednesday, June 15, 2011
Surya Nepal shuts garment unit
Surya Nepal Garment has closed down from today due to labour problem.
Since 3 PM yesterday (June 14, 2011) the workforce at the Surya Nepal garments factory at Biratnagar took hostage of around thirty managers on duty within the factory premises demanding that the company give them written assurances and guarantees for paying wages for the six days’ strike during last month.
The managers took a principled stand and requested that all managers on duty be immediately released before talks. However, the workforce did not listen and instead threatened and turned hostile.
They kept the managers, including a pregnant woman confined within the factory premises without food and water throughout the night.
After unsuccesful attempts, the company alerted the district security officials and sought their help to release the confined staff.
Today morning, the security officials and police entered the factory premises and tried unsuccessfully to settle the issues with the workforce in releasing the confined staff. The workforce not only refused to release staff but also refused food and water to them.
Finally at three in the afternoon, after a 24 hour siege, the police had to step in to forcibly release of the confined staff and take them to safety, outside the factory premises.
But the workforce started rampage within the factory premises. After the destructive activities of the workers, the police force had again to forcibly evict the rampaging workers from the factory premises.
The company has also discussed with all Trade Union bodies – major and fractional — and they have all denied their involvement in the activity and condemned the attack on Surya Nepal.
The Morang Chamber of Commerce also condemned the attack and has very clearly stated threat the rule ‘No Work, No Pay’ shall be applicable and binding to all.
The Company along with the District authorities and the Morang Chamber of Commerce has termed the strike and confinement of the company managers for over 24 hours without food and water a totally illegal act.Due to the extraordinary situation the company has declared a lockout, said the company.
Surya nepal is one of the largest garment unit in the country.
Earlier, the employers and the three major trade unions have entered into an agreement to implement 'No Work, No Pay', social security for the workers and hike the salary and the daily wages but the UCPN-Maoists splinter faction and some Tarai -based trade unions protested against the agreement.
Since 3 PM yesterday (June 14, 2011) the workforce at the Surya Nepal garments factory at Biratnagar took hostage of around thirty managers on duty within the factory premises demanding that the company give them written assurances and guarantees for paying wages for the six days’ strike during last month.
The managers took a principled stand and requested that all managers on duty be immediately released before talks. However, the workforce did not listen and instead threatened and turned hostile.
They kept the managers, including a pregnant woman confined within the factory premises without food and water throughout the night.
After unsuccesful attempts, the company alerted the district security officials and sought their help to release the confined staff.
Today morning, the security officials and police entered the factory premises and tried unsuccessfully to settle the issues with the workforce in releasing the confined staff. The workforce not only refused to release staff but also refused food and water to them.
Finally at three in the afternoon, after a 24 hour siege, the police had to step in to forcibly release of the confined staff and take them to safety, outside the factory premises.
But the workforce started rampage within the factory premises. After the destructive activities of the workers, the police force had again to forcibly evict the rampaging workers from the factory premises.
The company has also discussed with all Trade Union bodies – major and fractional — and they have all denied their involvement in the activity and condemned the attack on Surya Nepal.
The Morang Chamber of Commerce also condemned the attack and has very clearly stated threat the rule ‘No Work, No Pay’ shall be applicable and binding to all.
The Company along with the District authorities and the Morang Chamber of Commerce has termed the strike and confinement of the company managers for over 24 hours without food and water a totally illegal act.Due to the extraordinary situation the company has declared a lockout, said the company.
Surya nepal is one of the largest garment unit in the country.
Earlier, the employers and the three major trade unions have entered into an agreement to implement 'No Work, No Pay', social security for the workers and hike the salary and the daily wages but the UCPN-Maoists splinter faction and some Tarai -based trade unions protested against the agreement.
Tuesday, June 14, 2011
Financial system is safe: Central bank governor
The overall financial system is safe, said central bank governor Dr Yubraj Khatiwada.
“Though, there are some problems in some of the financial institutions, overall financial system is safe,” he said, addressing the official merger announcement programme of H&B Development Bank here in Kathmandu today.
“Currently, the financial sector is passing through teething problem,” he said, adding that current liquidity problem is a short-term problem and has been addressed through repo or refinancing.
“The central bank is addressing current problems in every possible way to keep depositors’ confidence intact on financial sector. But he urged the financial institutions not to misunderstand central bank’s generosity. “Central bank will not rescue bad financial institutions,” Khatiwada said, banks are the custodians of public deposit. Financial sector depends upon public faith and its financial institutions’ duty to keep public faith by following central banks directives.
”Some financial institutions are in trouble due to bad governance and others’ due to over dependency on institutional depositors and lack of portfolio management effectively, which is not a good trend, he said, requesting banks and financial institutions to differentiate between shareholders and depositors. “Unlike shareholders, the depositors will one day withdraw their deposits and the financial institutions should better understand and diversify risk, manage portfolio and be less dependent on institutional depositors,” he said.
Like in any trade, financial sector also has to passes through a cycle but we should take a lesson and move ahead, he said, adding that the central bank is overcoming all the problems one by one.
On the occasion, Khatiwada welcomed the move of two financial institutions — Himchuli Bikas Bank, Pokhara and Birgunj Finance, Kathmandu — for merger and becoming H&B Development Bank with Rs 897.93 million paid up capital and 23 branch networks.
The central bank has been encouraging for mergers of financial institutions as a small economy like Nepal maynot need many financial institutions but strong financial institutions to help propel economic growth. “The financial institution should consolidate,” he said, adding that Monetary Policy will address some of the bottlenecks and Fiscal Policy will address others, if there are any practical problems in merger.
“H&B Development Bank has created a history by proving that two financial institutions can be merged,” said CEO of H&B Development Bank Jasoda Sainju, the first lady CEO in the banking history of the country. “We will cater to the financial needs of customers by bringing various products,” she added.
Review on working area in cards
KATHMANDU: Central bank governor Dr Yubraj Khatiwada hinted at redefining and classification of working areas of class A, B, C, and D financial institutions. "It is high time the central bank review and define commercial bank, development bank, finance companies and microfinance institutions' working areas," he said, adding that there is no logic in allowing every one do everything.
“Though, there are some problems in some of the financial institutions, overall financial system is safe,” he said, addressing the official merger announcement programme of H&B Development Bank here in Kathmandu today.
“Currently, the financial sector is passing through teething problem,” he said, adding that current liquidity problem is a short-term problem and has been addressed through repo or refinancing.
“The central bank is addressing current problems in every possible way to keep depositors’ confidence intact on financial sector. But he urged the financial institutions not to misunderstand central bank’s generosity. “Central bank will not rescue bad financial institutions,” Khatiwada said, banks are the custodians of public deposit. Financial sector depends upon public faith and its financial institutions’ duty to keep public faith by following central banks directives.
”Some financial institutions are in trouble due to bad governance and others’ due to over dependency on institutional depositors and lack of portfolio management effectively, which is not a good trend, he said, requesting banks and financial institutions to differentiate between shareholders and depositors. “Unlike shareholders, the depositors will one day withdraw their deposits and the financial institutions should better understand and diversify risk, manage portfolio and be less dependent on institutional depositors,” he said.
Like in any trade, financial sector also has to passes through a cycle but we should take a lesson and move ahead, he said, adding that the central bank is overcoming all the problems one by one.
On the occasion, Khatiwada welcomed the move of two financial institutions — Himchuli Bikas Bank, Pokhara and Birgunj Finance, Kathmandu — for merger and becoming H&B Development Bank with Rs 897.93 million paid up capital and 23 branch networks.
The central bank has been encouraging for mergers of financial institutions as a small economy like Nepal maynot need many financial institutions but strong financial institutions to help propel economic growth. “The financial institution should consolidate,” he said, adding that Monetary Policy will address some of the bottlenecks and Fiscal Policy will address others, if there are any practical problems in merger.
“H&B Development Bank has created a history by proving that two financial institutions can be merged,” said CEO of H&B Development Bank Jasoda Sainju, the first lady CEO in the banking history of the country. “We will cater to the financial needs of customers by bringing various products,” she added.
Review on working area in cards
KATHMANDU: Central bank governor Dr Yubraj Khatiwada hinted at redefining and classification of working areas of class A, B, C, and D financial institutions. "It is high time the central bank review and define commercial bank, development bank, finance companies and microfinance institutions' working areas," he said, adding that there is no logic in allowing every one do everything.
Nepse plunges below 300 points
Nepal today closed at 297.63 points to the low of 2005-06.Nepse hovered around 300 points during the fiscal year 2005-06. It was at 287.90 points on July 17, 2005.
Lack of investors’ confidence, poor economic performance, government’s apathy towards the capital market and recent ‘crisis’ in some of the banks and financial institutions have contributed to the continuous fall in the secondary market index.
The two key players commercial banks and hydropower subgroups’ whopping fall dragged the market to almost seven year low.
Hydropower subgroup shed 13.22 points to 472.97 points due all the four listed hydropower companies loss in the day’s trading. Arun Valley hydro lost Rs 36 per unit share, Chilime Hydropower lost Rs 17, Butwal Power lost Rs 7 and National Hydropower lost Re 1 per unit share to pull the hydropower subgroup down.
Similarly, Nabil lost Rs 65 per unit share, whereas Laxmi Bank lost Rs 29 and Standard Chartered Bank Nepal lost Rs 21 per unit share to drag the commercial bank subgroup by 6.1 points to 242.72 points today.
Similarly, manufacturing and production subgroup lost 3.38 points due to Unilever that has lost Rs 99 per unit today, whereas Development banks subgroup lost 2.32 points, insurance subgroup lost 2.28 points, finance companies subgroup shed 1.44 points.
However, others subgroup which has Nepal Telecom under its belt gained 1.17 points and hotels subgroup gained 0.56 points. Nepal Telecom gained Re 1 per unit share. The trading subgroup didnot see its trading today.
The secondary market also saw transaction of Rs 15.33 million today — almost 10 times less than the market used to in its heydays.
The government has directed the institutional investors like Citizen Investment Trust and Rastriya Beema Sansthan to buy the stocks of undervalued and profitable shares, they have been buying small amounts — under their institutions regulation — that could not propel the market.
Lack of investors’ confidence, poor economic performance, government’s apathy towards the capital market and recent ‘crisis’ in some of the banks and financial institutions have contributed to the continuous fall in the secondary market index.
The two key players commercial banks and hydropower subgroups’ whopping fall dragged the market to almost seven year low.
Hydropower subgroup shed 13.22 points to 472.97 points due all the four listed hydropower companies loss in the day’s trading. Arun Valley hydro lost Rs 36 per unit share, Chilime Hydropower lost Rs 17, Butwal Power lost Rs 7 and National Hydropower lost Re 1 per unit share to pull the hydropower subgroup down.
Similarly, Nabil lost Rs 65 per unit share, whereas Laxmi Bank lost Rs 29 and Standard Chartered Bank Nepal lost Rs 21 per unit share to drag the commercial bank subgroup by 6.1 points to 242.72 points today.
Similarly, manufacturing and production subgroup lost 3.38 points due to Unilever that has lost Rs 99 per unit today, whereas Development banks subgroup lost 2.32 points, insurance subgroup lost 2.28 points, finance companies subgroup shed 1.44 points.
However, others subgroup which has Nepal Telecom under its belt gained 1.17 points and hotels subgroup gained 0.56 points. Nepal Telecom gained Re 1 per unit share. The trading subgroup didnot see its trading today.
The secondary market also saw transaction of Rs 15.33 million today — almost 10 times less than the market used to in its heydays.
The government has directed the institutional investors like Citizen Investment Trust and Rastriya Beema Sansthan to buy the stocks of undervalued and profitable shares, they have been buying small amounts — under their institutions regulation — that could not propel the market.
Monday, June 13, 2011
Frozen land price, market distorting decision led to liquidity crunch
Government’s market distorting decisions, low spending coupled with frozen land prices led to the current liquidity crunch, according to economists.
"Land prices must be allowed to collapse so that frozen assets thaws and starts generating liquidity," according to former finance secretary Rameshwor Prasad Khanal.
"Without price collapse market dynamism is not possible," he said, adding that maekrt players should be ready to face losses but central bank must not help banks and financial institutions minimise loss by generous refinancing.
However, in the short term, refinancing alongwith strong reform plan would allow them time to recover cash from their frozen assets," the former bureaucrat added.
Though, he did not rule out the possibility of some development banks and finance companies' collapse but that could be prevented by pushing them to merger, he said.
The financial institutions should go for merger as soon as possible that is good for economy and financial health of the institutions.
Central bank has also termed the refinancing as a short term measure. In the long run, they have to manage their portfolio and assets liability mismatch as the current liquidity crunch is a result of lack of management of assets and liabilities.
But the brighter side of the current crisis is that the total banking assets has not eroded in the recent four months. "There was erosion in the past year, but the banks and financial institutions are slowly recovering," Khanal said, adding that aggregate Credit to Deposit ratio is close to 90 per cent meaning, even if there is aggregate value loss of 20 per cent too, the depositors money will not be in risk and they do n to fear.
But depositors are not yet confident on the financial institutions due recent series of ''bad news''.
"People's confidence has not been restored yet," Prof Dr Bishwhambher Pyakurel said, blaming the government for market distorting decisions lately. “The root cause of recent trouble is politics-led economy," he said, adding that the political leadership is not accountable to the people but to the party. "The government itself is responsible for the current crisis."
Had the fiscal policy supported, there would not have been liquidity crunch, he said, blaming 'partly' to the financial institutions also. "In some institutions there is excess liquidity and others are in trouble,” Pyakurel added.
The bankers, however, blame low government spending for the current liquidity crunch. "Accelerated government spending could help but slow government spending is not the only reason of current liquidity tightening," Khanal said, adding that unspent government money always remains in the government system. "It goes to the market through open market operations and it helps lubricate the market helping generate more liquidity."
"The government -- especially the finance ministry's -- apathy towards economy is the grave concern currently as it has put the economic agenda at the back burner," said entrepreneur and CA member Binod Chaudhary.
"Land prices must be allowed to collapse so that frozen assets thaws and starts generating liquidity," according to former finance secretary Rameshwor Prasad Khanal.
"Without price collapse market dynamism is not possible," he said, adding that maekrt players should be ready to face losses but central bank must not help banks and financial institutions minimise loss by generous refinancing.
However, in the short term, refinancing alongwith strong reform plan would allow them time to recover cash from their frozen assets," the former bureaucrat added.
Though, he did not rule out the possibility of some development banks and finance companies' collapse but that could be prevented by pushing them to merger, he said.
The financial institutions should go for merger as soon as possible that is good for economy and financial health of the institutions.
Central bank has also termed the refinancing as a short term measure. In the long run, they have to manage their portfolio and assets liability mismatch as the current liquidity crunch is a result of lack of management of assets and liabilities.
But the brighter side of the current crisis is that the total banking assets has not eroded in the recent four months. "There was erosion in the past year, but the banks and financial institutions are slowly recovering," Khanal said, adding that aggregate Credit to Deposit ratio is close to 90 per cent meaning, even if there is aggregate value loss of 20 per cent too, the depositors money will not be in risk and they do n to fear.
But depositors are not yet confident on the financial institutions due recent series of ''bad news''.
"People's confidence has not been restored yet," Prof Dr Bishwhambher Pyakurel said, blaming the government for market distorting decisions lately. “The root cause of recent trouble is politics-led economy," he said, adding that the political leadership is not accountable to the people but to the party. "The government itself is responsible for the current crisis."
Had the fiscal policy supported, there would not have been liquidity crunch, he said, blaming 'partly' to the financial institutions also. "In some institutions there is excess liquidity and others are in trouble,” Pyakurel added.
The bankers, however, blame low government spending for the current liquidity crunch. "Accelerated government spending could help but slow government spending is not the only reason of current liquidity tightening," Khanal said, adding that unspent government money always remains in the government system. "It goes to the market through open market operations and it helps lubricate the market helping generate more liquidity."
"The government -- especially the finance ministry's -- apathy towards economy is the grave concern currently as it has put the economic agenda at the back burner," said entrepreneur and CA member Binod Chaudhary.
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