आर्थिक स्वतन्त्रता र संविधान दिवस

• ऊर्जा, जलस्रोत तथा सिँचाइ मन्त्रालयले आफैंले ल्याएको नेपाल विद्युत् नियमन ऐनको व्यवस्थाविपरीत विद्युत् विधेयकको मस्यौदा ल्याएको छ । मन्त्रालयले आन्तरिकरूपमा तयार गरेर २४ भदौमा प्रतिक्रियाका लागि सार्वजनिक गरेको विद्युत्सम्बन्धी कानुनलाई संशोधन र एकीकरण गर्न बनेको विधेयकको मस्यौदामा नियमन आयोगको अधिकार कटौती गर्दै मस्यौदा ल्याएको हो । मस्यौदालाई निजी क्षेत्रका जलविद्युत् प्रबन्धकहरूले समेत ‘निरंकुश’ भएको टिप्पणी गरेका छन् । पछिल्लो समय निजी क्षेत्रका जलविद्युत् आयोजनाले नेपालको विद्युत्को माग पूरा गर्न धेरै मद्दत गरेका छन् । तर, सरकार उनीहरूप्रति नै कठोर बन्दै उनीहरूको लगानी डुबाउने खेलमा लागेको छ ।

• अर्थमन्त्री डा. युवराज खतिवडाले प्रतिनिधिसभामा पेस गरेको नेपाल राष्ट्र बैंक ऐन, २०५८ को संशोधन विधेयक जस्ताको तस्तै पारित भए नेपाल राष्ट्र बैंकको स्वायत्तता खोसिने भएको छ । लामो छलफल तथा बहसपछि २०५८ सालमा नेपाल राष्ट्र बैंक ऐन ल्याएर राष्ट्र बैंकलाई स्वायत्तता दिइएको थियो, जसका कारण आज नेपालमा वित्तीय स्थायित्व छ र बैंक तथा वित्तीय संस्थाहरू अन्य क्षेत्रको तुलनामा प्रतिस्पर्धी तथा पारदर्शी छन् । साथै, सर्वसाधारण बचतकर्तामा बैंक तथा वित्तीय संस्थाप्रति विश्वास हुनुमा राष्ट्र बैंकको स्वायत्तता एउटा प्रमुख कारण हो । सरकारले जुनसुकै बहानामा गभर्नर हटाउन सक्ने प्रावधानले वित्तीय स्थायित्वमा नै असर पार्ने देखिन्छ र भोलिका दिनमा ‘डमी’ गभर्नर राखेर अर्थमन्त्रालयले केन्द्रीय बैंक चलाउने स्थिति निम्त्याउने खतरा देखिन्छ । 

वर्तमान सरकारले कसरी आफैंले बनाएका संस्थाहरू आफैं भुत्ते बनाउन खोज्दैछ भन्ने माथिका दुई उदाहरणले प्रस्ट पार्छ । स्थापित संस्थाहरू ध्वस्त पार्ने तथा नयाँ संरचनामा आफ्ना कार्यकर्ता भर्ती गर्ने गरी संस्थागत रूपमै नेपालको अर्थतन्त्रमा प्रहार भइरहेको उदाहरण पनि हुन् यिनीहरू । पछिल्लो समय नेपालमा बैंक तथा वित्तीय संस्था तथा जलविद्युत् आयोजना देशका लागि अत्यन्त आवश्यक तथा प्रतिफल पनि राम्रै दिइरहेका क्षेत्र हुन् । सरकारको लगानीबिना नै यी क्षेत्रले अर्थतन्त्रमा राम्रो योगदान मात्र दिएका छैनन्, नाफा गरेर आफैं मात्र नखाएर सेयरहोल्डरहरूलाई समेत प्रतिफल बाँडेर समाजवादउन्मुख अर्थतन्त्र बनाउन साथ पनि दिइरहेका छन् ।
तर, उनीहरू नै समाजवादउन्मुख दुईतिहाई सरकारको वक्रदृष्टिमा परेका छन् । नियामकीय स्वायत्तता खोसेर नियमनकारी निकायलाई भुत्ते बनाउँदा बजारमा नक्कली पुँजीवाद तथा नक्कली समाजवाद हावी हुन् गई अर्थतन्त्र धरापमा पर्छ भन्ने कुराको ज्ञान हुन अर्थशास्त्रमा विद्यावारिधि गर्नु पर्दैन, विगत एक दशकको हाम्रै बजारको क्रियाकलाप तथा त्यसका नतिजा हेरे पुग्छ । यसबाट नेपालको अर्थतन्त्रलाई कता डो-याइँदैछ, त्यसको छनक पाइन्छ । संविधानमा नै सरकार, निजी क्षेत्र र सहकारी अर्थतन्त्रका तीन खम्बा भनेर लेखिएपछि सरकारले निजी क्षेत्रलाई कसरी हेर्ने भन्ने कुरामा कुनै संशय नहुनुपर्ने हो ।
निजी क्षेत्रप्रति सरकारको आशक्ति पनि बेलाबेलामा प्रकट हुन्छ, तर निजी क्षेत्रले नै लाज मान्ने गरी प्रकट भएका यस्ता आशक्तिले निजी क्षेत्रलाई अर्थतन्त्रको खम्बा होइन, दलाल पुँजीवादको विकृत रूपमा प्रकटित गरिदिएका उदाहरणहरू पछिल्ला वर्षमा धेरै छन् । यसैगरी संसारको उत्कृष्ट प्रजातान्त्रिक व्यवस्था अर्थात् संघीय लोकतान्त्रिक गणतन्त्र अँगालेको नेपालमा मन्त्रीपिच्छे निजी क्षेत्रलाई हेर्ने दृष्टिकोण पनि फरक–फरक छ । निजी क्षेत्रलाई बजारमा प्रतिस्पर्धात्मक ढंगले काम गर्न दिने र सरकारले नियमन गर्ने हो भने नियमनकारी निकायलाई स्वायत्त बनाउनु पहिलो सर्त हो ।
यदि बिमा समिति, नेपाल धितोपत्र बोर्डजस्ता नियमनकारी निकायलाई स्वायत्तता नदिने र राष्ट्र बैंकजस्ता स्वायत्त निकायलाई पनि अर्थमन्त्रालयको शाखाझैं व्यवहार गर्ने हो भने संविधानमा लेखिएको समाजवादउन्मुख अर्थतन्त्रको निर्माण गर्न सरकार शतप्रतिशत असफल हुने निश्चित छ । दुईतिहाइको सरकारले व्यवसायीका कुनै एक झुन्डका कुरा सुनेर नियमनकारी निकायलाई भुत्ते बनाउने प्रयास गरेको हो भने पनि बेलैमा सोचौं, यो नेपाली जनताले दशकौंसम्म लडेर ल्याएको संविधानप्रति ठूलो धोका हुनेछ । उखानै छ, ल्हासा जानु कुतिको बाटो, अर्थात् समाजवादउन्मुख अर्थतन्त्र बनाउन सरकार पुँजी निर्माण र वितरणको कस्तो मोडल बनाउँदैछ र कस्तो मोडलमा काम गरिरहेछ, त्यसैले नेपालमा लोकतान्त्रिक गणतन्त्रप्रति जनताको वितृष्णा बढ्छ वा घट्छ ।
तर, सरकार भ्रष्टाचारजस्ता सामाजिक बिमारीको उपचार गरेर जनताको मन जित्नु त कता हो कता, झन् भ्रष्टाचारमार्फत कमाएको कालोधन सेतो बनाउन समाजवादको नाममा नक्कली समाजवादको प्रयोग गर्दैछ । यसै मेसोमा निजी क्षेत्रलाई पनि सरकार आफ्नै अनुकूल प्रयोग गर्न नियमनकारी निकायको स्वायत्तता हरण गर्न उद्यत देखिएको छ । त्यसैले नेपालको इतिहासकै सबैभन्दा शक्तिशाली सरकारले विभिन्न काल्पनिक शत्रु खडा गरेर गणतन्त्रमाथि खतरा छ भन्दै हिँड्नुको साटो संविधानको पूर्ण पालना गर्न तथा गराउन लाग्दा नै ‘सुखी नेपाली समृद्ध नेपाल’ को नारा सफल होला । संविधानको पालना भनेको संविधानमा लेखिएका समाजवादउन्मुख अर्थतन्त्र निर्माण गर्ने तथा संविधानले प्रत्याभूत गरेको हरेक नेपालीको आर्थिक स्वतन्त्रता सुनिश्चित गर्ने हो, जसको अर्थ प्रत्येक नेपाली समाजलाई हानि नहुने तथा गैरकानुनीबाहेक आफूले चाहेको पेसा–व्यवसाय गर्न स्वतन्त्र छन् ।
उनीहरूको लगानीको सुरक्षा हुनुप-यो, तर दुर्भाग्य ! सरकार जनताको जीउज्यानको तथा धन सम्पत्तिको रक्षा गर्न पनि असमर्थ देखिएको छ । संविधानले प्रत्याभूत गरेको अधिकारको रक्षा गर्ने दायित्व सरकारको हो, किनकि सरकार संविधानको संरक्षक पनि हो । तर सरकार आफैं संविधान मिच्दै अर्थतन्त्रका खम्बाहरूको दुरुपयोगतर्फ अग्रसर भइरहेको छ । सहकारीलाई राजनीतिक हतियार बनाएर सोझासाझा जनता ठग्ने हतियार बनाइँदा सरकार मूकदर्शक छ । निजी क्षेत्रका नाममा रातारात नामै नसुनेका समूहले अर्बौं लगानी गर्दा सरकारले देख्दैन । तर, वर्षौंदेखि नेपालमा लगानी गरिरहेका लगानीकर्तालाई हतोत्साही बनाउन कुनै कसर छोड्दैन । वास्तविक निजी क्षेत्र पीडित छ, तर रातारात उदाएका बिचौलिया बालुवाटार पुगेर आफ्नो अनुकुल नीतिनियम बनाउन सक्छ ।
यसरी जस्केलाबाट आएका लगानी तथा लगानीकर्ताले अर्थतन्त्र नै डुबाउने खतरा एकातिर छ भने अर्कातिर नेपालमा व्यावसायिक वातावरण नभएपछि लगानीकर्ता कुरेर बस्दैनन् र बिस्तारै पलायन हुन्छन् । विगतमा सबै राजनीतिक दलले भन्दै आएको र मान्दै आएको कुरा के पनि हो भने राजनीतिक मुद्दा समाधानपछि मात्र अर्थतन्त्रले गति लिन्छ । राजनीतिक मुद्दा संघीय गणतन्त्र संबिधान जारी गरेकै दिन छिनोफानो भइसक्यो । अब केही मुद्दा बाँकी भए संविधान भनेको कुनै अपरिवर्तनीय दस्तावेज होइन, संशोधन गर्न सकिन्छ ।
तर, २०७२ साल असोज ३ गतेदेखि पछिल्ला चार वर्षमा बाग्मतीमा धेरै पानी बगिसकेको छ । नेपालीको जीवनस्तरमा देखिने गरी केही परिवर्तन आएको छैन । विगत सात दशकदेखि नेपालीले आशा गरेको राजनीतिक स्थिरता त पाए, तर सरकारको भाषणबाहेक कतै आर्थिक क्रान्तिको नामोनिसान भेटिएको छैन । केही नेताका, केही कर्मचारीका, केही राजनीतिक बिचौलियका जीवनमा जनताले देखिने गरी नै आर्थिक क्रान्ति आएको देखिन्छ । तर, दशकौंदेखि न्याय, समानता तथा आर्थिक स्वतन्त्रताका लागि लडेका लाखौं नेपालीको जीवनस्तरमा देखिने गरी सुधार नआएसम्म जतिसुकै काल्पनिक पात्र खडा गरेर हावामा विरोध गरे पनि सरकार तथा व्यवस्थाप्रति जनताको वितृष्णा बढ्ने नै देखिन्छ, घट्ने देखिन्न ।
त्यसैले संविधानमा लेखिएको समाजवादउन्मुख अर्थतन्त्र निर्माण गर्ने बाटोमा लाग्ने हो भने सरकारले ढिलो नगरी निजी क्षेत्रलाई निगाहमा होइन, प्रतिस्पर्धी तथा पारदर्शी ढंगले काम गर्ने वातावरण बनाउनुप-यो । यसका लागि संसद्मा पेस भएका अर्थतन्त्रसम्बन्धी बिमासम्बन्धी कानुनलाई संशोधन र एकीकरण गर्न बनेको विधेयक, सूचना प्रविधिको सम्बन्धमा व्यवस्था गर्न बनेको विधेयक, धितोपत्र सम्बन्धी ऐन, २०६३ लाई संशोधन गर्न बनेको विधेयक, नेपाल राष्ट्र बैंक ऐन, २०५८ लाई संशोधन गर्न बनेको विधेयक, बैंक तथा वित्तीय संस्थासम्बन्धी ऐन, २०७३ लाई संशोधन गर्न बनेको विधेयक, औद्योगिक व्यवसायसम्बन्धी प्रचलित कानुनलाई संशोधन र एकीकरण गर्न बनेको विधेयक, औद्योगिक व्यवसाय विकास प्रतिष्ठान ऐन, २०५३ लाई संशोधन गर्न बनेको विधेयकजस्ता करिब दुई दर्जन विधेयकलाई परिमार्जनसहित बृहत् छलफल गरेर नियामकीय संस्थाहरूलाई नीतिगत तथा कानुनी हतियारसहित स्वायत्त बनाएर मात्रै पास गर्दा होला ।
अन्यथा स्थिर सरकारकै कारण अर्थतन्त्र भने वर्षांैसम्म अस्थिर हुन गए इतिहासले त मूल्यांकन गर्ला नै, वर्तमानमा नै पनि सरकारका असक्षमताको कारण व्यवस्थाप्रति वितृष्णा बढ्न जाने देखिन्छ । यसबाट सरकारमा रहेको दलमात्र होइन, नेपाली समाज तथा देशमा सामाजिक विग्रह हुने लक्षण पछिल्ला केही घटनाहरूले देखाइसकेका छन् । संविधान कार्यान्वयन गर्न सरकारमा रहेको दलको जिम्मेवारी बढी हुन्छ, हावामा मुक्का चलाउनुभन्दा बेलैमा हेक्का राखेको राम्रो !

Monetary Policy reduces CRR by 50 basis points

The central bank brought a cautious Monetary Policy for the fiscal year 2011-12 that however could be a little embarrassing for the fiscal policy.
The Monetary Policy has reduced the Cash Reserve Ratio (CRR) by 50 basis points or 0.5 percentage point to five per cent. “To ease the liquidity situation, the policy has reduced CRR by 0.5 percentage point to five per cent," said central bank governor Dr Yubraj Khatiwada. The revised CRR is estimated to instantly release around Rs 4 billion in the financial system.
However, the banks have to reduce their Credit to Deposit (CD) ratio by the mid-January – that is in six months to – 80 per cent from current 85 per cent, which will curb the lending capacity of the banks.
The Monetary Policy has targeted seven per cent inflation and five per cent growth rate following the budget for the current fiscal year 2011-12.“To support the budget’s growth rate of five per cent, the central bank is planning 12.5 per cent broad money supply," Khatiwada said without elaborating its implications on price hike. In the last fiscal year too, the Monetary Policy had aimed seven per cent inflation and planned 15 per cent money supply.
However, the money supply remained 3.5 per cent – of commercial banks – and 7.3 per cent including commercial banks, development banks and finance companies. But the inflation remained over 10 per cent in an average.
The central bank governor accepted that the overall macroeconomic policy needs revision as the Monetary Policy could not achieve inflation and Balance of Payment (BoP) target. The BoP that was Rs 11.67 billion deficit in the first 10 months of the fiscal year, has however, recorded a ‘miraculous’ surplus of around Rs 1 billion by the end of 2010-11, he said, attributing 'surprise surplus' to foreign grants and aids released in the last month.
For the current fiscal year, the Monetary Policy has targetted Rs 5 billion BoP surplus.
The Monetary Policy did not change bank rate – the most awaited by the banks and financial institutions – refinancing rate and Statutory Liquidity Ratio (SLR), but promised to revise refinancing according to liquidity need.
The Monetary Policy has however increased foreign exchange facilities as a citizen can get exchange facility of $2,500 for once or $5000 in a fiscal year at maximum revising the facility from last fiscal year's $2000 and $4000.
Similarly, NRNs can open bank account in foreign currency and special arrangement will be made for Nepalis also to open bank account in foreign countries. "The banks can exchange foreign currency up to $1,000 provided the beneficiary supplies credible source of foreign exchange with identity," according to the Monetary Policy that has increased deprived sector lending to 3.5 per cent, though in phase-wise manner to increase this rate by 0.5 percentage point for next two years due to failure in directing lending towards productive sector and deprived sector
The Policy has addressed the crisis of trust on banking channels by extending deposit insurance up to Rs 200,000 to commercial banks as well to make the small depositors feel safe. The banks and financial institutions deposits have also seen a rise of 8.2 per cent to Rs 788.72 billion by the end of fiscal year.
However, the foreign exchange reserve has increased by a mere Rs 2 billion in a fiscal year to Rs 270 billion in the fiscal year 2010-11 from a fiscal year ago's Rs 268 billion.
Though, merger has become a buzz word in the recent days, the Monetary Policy has offered nothing to encourage mergers. Apart from encouraging the banks and financial institutions to open branches in the selected nine districts, where there is no access to finance, the Policy has increased the deprived sector lending and directed to banks and financial institutions to include a collateral free loan of up to Rs 200,000 for the study of technical education under deprived sector lending.
The micro finance institutions will also be encouraged to go to the districts, where there is no financial access, it said.

Monetary Policy target for the fiscal year 2011-12
Growth: five per centInflation: seven per cent
Broad Money Supply: 12.5 per cent
Balance of Payments surplus: Rs 5 billion
Deposit growth: 13 per cent

Achievement in fiscal year 2011-12
Growth: 3.47 per cent (by the first half of FY)
Inflation: 9.6 per cent (by the first 10 months)
Money Supply expansion: 3.7 per cent (by the first 10 months)
Balance of Payments: Rs 1 billion surplus (end of fiscal year)
Foreign Exchange Reserve: Rs 270 billion (end of fiscal year)


Fiscal Policy keeps mum on cooperatives
The Monetary Policy is silent on cooperatives supervision and monitoring as spelt by the budget. The Monetary Policy is supposed to support the budget – the government's Fiscal Policy – however the central bank is in a fix by the government obsession to the cooperatives and bringing them under the central bank.
The government has without homework and consultation has asked the central bank to monitor the cooperatives but the banks and financial institutions come under the Nepal Rastra Bank Act, Bafia and Financial Crime Act, whereas the cooperatives are under the Cooperatives Act. The NRB Act does not allow the central bank to monitor let alone punish the cooperatives.
The central bank – the regulatory authority of monetary market -- currently supervise and monitor 219 banks and financial institutions including 31 commercial banks, 87 development bank, 80 finance companies (78 in operation), and 21 micro finance development banks.
At a time, when the central bank has not been able to supervise the banks and financial institutions that it has licenced due to lack of enough manpower has been asked by the government to supervise the cooperatives that could lead to more casualties.
The central bank board members are against the inclusion of cooperatives against the NRB Act under the central bank.

Bankers concern about proposed BAFIA amendment

Amendment back tracks the liberal economic policy

Nepal Bankers Association (NBA) has termed the proposed amendment of Banks and Financial Institutions Act (BAFIA) as a regressive step as it has not only tried to back track liberal economic policy but also curtail the central bank and private sector's roles.
“It is a policy reversal," said vice-president of Nepal Bankers Association Rajan Singh Bhandari. "It has also tried to encroach the territory of the central bank," he said, adding that the proposed amendment will clip the regulatory wings of the central bank and discourage the private sector investment.
"With such draconian proposal, no new investment will come," said former NBA president and CEO of Kumari Bank Radhesh Pant. "The overall economy will suffer due to such Act," he said, adding that the proposed reduction in the single promoter share could lead to a crash in the secondary market due to over supply.
"The promoters have to off load their shares flooding the secondary market that could bring the share prices to the lowest level," said Sudhir Babu Khatri, president and CEO of DCBL Bank.
The proposed amendment is going to create lots of confusions, according to the bankers. The cap on CEO's salary — the much controversial issue lately — CEO and director's roles and repsosibilities, hike in deprived sector lending and venture capital are some of the issues the bankers showed serious concern over.
"The Act should not categorically mention percentage and fix ceilings as it would create practical hurdles in the future," suggested CEO of Lumbini Bank Shovan Dev Pant. "The Act should be forward looking," he said, adding that the proposed amendment has, but, back tracked the liberal economic policy adopted by the country some two decades ago.
"It has also included the clauses that could be addressed by Nepal Rastra Bank's directives and Act," Bhandari said," The NRB Act and proposed amendment will contradict each other.
The proposed amendment has also discouraged the industrialists to open banks and financial institutions to avoid conflict of interest, which is principally correct. However, Bhandari asked, “If not the entrepreneurs, who has the money to be the promoters?"
The CA members have suggested amendments after discussions in Parliamentary sub committee but it seem to be guided through their political affiliation rather than economic sense, according to the bankers.

Cabinet appoints Dr Khatiwada as central bank governor and Mallick as PAF vice chairman

The cabinet on Friday appointed Dr Yubaraj Khatiwada as the governor of the central bank and Bidhyadhar Mallick as vice chairman of Poverty Alleviation Fund (PAF).

Khatiwada will be the 15th governor of Nepal Rastra Bank that has remained without a governor for almost two months, after former governor Vijaya Nath Bhattarai’s retirement on January 31.

In absence of governor, the central bank has not been able to publish mid-term analysis of the Monetary Policy — that needs a serious relook.

The central bank remained without a head as there was a serious rift among the ruling political parties on the appointment.

The current vice-chairman at the National Planning Commission, Khatiwada will have a challenge to contend with depleting forex reserves, negative balance of payment, rising inflation and exposure of the financial institutions to riskier sectors as the governor.

However, his long experience at the central bank will help him face the challenges. He has retired as an executive director from the central bank only a year ago.

The government had formed a committee headed by finance minister Surendra Pandey -- with former secretary Dr Bhola Chalise and Govind Bahadur Thapa -- to recommend the names for governor’s post, according to the Nepal Rastra Bank Act. The committee had recommended Dr Khatiwada, the vice-chairman of the National Planning commission, finance secretary Rameshwor Khanal and deputy governor Bir Bikram Rayamajhi.

Khatiwada began his career in Nepal Rastra Bank in 1983. He has also worked as an economic adviser and was a member of the NPC.

Khatiwada -- the PhD holder in monetary economics from Delhi University in 1991 -- was born in Taplejung on August 13, 1956. He did his masters in economics in 1981 and masters in public administration in 1984.

Kahatiwada, who started carier in Nepal Rastra Bank in 1983, has also worked as an economic adviser and was a member of the NPC. He is also guest lecturer of Tribhuwan University, Purbanchal University and Kathmandu University.

He has worked on improvement of poor industries, privatisation of public enterprises and fiscal reform committees. President for the two terms of Nepal Management Association (MAN) Khatiwada has also worked in Mongolia, Bhutan, Afghanistan, Laos, Sri-lanka, Bangladesh and Bhanuatu as a senior economist of UNDP.

Governor Bhattarai starts second innings

"I am back home," said reinstated governor Bijaya Nath Bhattarai today, promising to continue the fight against the financial mafia. "The support of my collegues was my moral strength," he said addressing Nepal Rastra Bank (NRB) employees -- who had been waiting for him the whole day.

Immediately after taking charge, Bhattarai said the monitoring and supervision capacity of the central bank have to be enhanced. "Mushrooming banks and financial institutions have not contributed to the real sector's growth," he said adding that the increase in number has rather encouraged unhealthy competition. He was also against urban-centric banks and financial institutions. "There are more opportunities in semi-rural areas," he said advising them to serve the rural populace.

Bhattarai opined that the country needs a few but strong banks and financial institutions rather than many weak ones. "Merger and Acquisition (M&A) should be encouraged to make stronger banks," he added.

Asked if the Monetary Policy announced by his predessesor could be changed, he said that Monetary Policy is the central bank's policy, and so it would not make any difference who brings it. "It iss a team of NRB that works on it and mere change of governor will not have any impact on it," said Bhattarai. However he was of the view that SLR -- the policy brought after 17 years -- was not necessary.

"Whatever good work that my predessesor Kshetry did, I will continue," he assured. "Others like the liquidation case of Nepal Development Bank (NDB) I need to look into. NDB should have improved when NRB declared it a problematic bank and had also issued a slew of directives but it did not improve and today it has been sent to the court for liquidation," Bhattarai added.

The continution of financial sector reform programme, good governance, accountability, transparency, lowering the NPA of Rastriya Banijya Bank and Nepal Bank Ltd, shareholder access to information are some of challenges for NRB, according to him.

On the occasion, the then NRB executive director Surendra Bahadur Pradhan said that it took them two years and 15 days to get justice. "The financial mafiosi and conpiracy against the central bank and its honest employee has been defeated," he said advising NRB employees to keep their morale high.

An emotional Pradhan also thanked the media and NRB employees for supporting him and Bhattarai throughtout the cooked up case against them.

The CIAA had filed a case at the Special Court against Bhattarai and Pradhan on June 29, 2007. The Special Court sent the case to the Supreme Court after it could not decide unanimously. The Supreme Court on July 15 acquitted them.

Kshetry discharged

KATHMANDU: The government discharged governor Deependra Bahadur Kshetry before reinstating Bijaya Nath Bhattarai. Kshetry -- after receiving the discharge letter from the finance ministry -- coolly walked out of the central bank and took a cab home. He was appointed by the erstwhile government on January 16 for a one-year term till January 31, 2010. NRB employees offered him a ride home but a composed Kshetri declined and took a taxi from the gate of the NRB . The Ba 1 Jha 7068 taxi rode him to home. However, he hinted at moving the court, as according to him, the discharge letter was not according to the NRB Act. Governor Bhattarai also praised his predecessor for his honesty and moral strength. "Kshetry is my friend," Bhattarai said adding that if he moves court, it will not hamper the day-to-day affairs of the central bank.

NRB to hand over management of Bank of Kathmandu back

Nepal Rastra Bank (NRB) will handover the management of Bank of Kathmandu (BoK) back to the bank's new Board of Directors (BoD) tomorrow after BoK's special AGM today formed the new board.
"The present management committee appointed by NRB for using the authority of BoD -- led by Laxmi Prapanna Niroula as co-ordinator and Ramesh Kumar Pokharel, Prem Prasad Pandey, Murari Basnet as members -- will hand over the management to the new BoK board tomorrow," said a source at NRB. "The NRB board meeting tomorrow will ask the Niroula-led NRB team to handover the management and come back," the source said adding that the NRB team is mandated to hand over the management to the new board members after BoK's special AGM.
BoK today elected four directors from public shareholders -- Govinda Regmi, Bishnu Banjade, Narendra Basnyat and Dr Hem Subedi -- and unnanimously selected three directors Ramesh Nath Dhungel, Bijaya Krishna Shrestha and Satya Narayan Manandhar from the promoters.
Five contestants from the public -- along with former director Balaram Neupane -- had filed their candidacy for the four positions as a majority of BoK's shares is with the public. The promoters are only 42 per cent stakeholders.
Earlier on May 19, NRB had taken over the bank's management suspending its board and had sent a four-member team led by NRB executive director Niroula. This was after the BoK board's controversial decision to 'call back' Radhesh Pant from the post of managing director.
The crisis precipitated after the 313th board meeting of BoK on March 22, which decided to recall Pant from the post of MD. Though the decision was taken by a majority of the board members, Pant was not given a chance to furnish his explanation. Four directors voted against him while two -- Sitaram Thapaliya and Sudarshan Poudel -- supported him.
NRB took over the bank's management to safeguard the investors' and promoters' interests due to dispute among board members and also to send a strong signal that the regulatory authority of the monetary market was keeping a hawk's eye on financial institutions. It is empowered to take over the management of any financial institution under NRB Act 2063 (Section 54) after giving it a seven-day chance to furnish an explanation.
However, NRB revoked its earlier decision to suspend the directors on June 25 and allowed them to contest in the special AGM after the suspended board realised its mistake and agreed to work together for the betterment of the bank, investors and promoters.The suspended board members, who had moved the Supreme Court against 'NRB intervention' -- in their own words -- also withdrew the case.
NRB published a Due Deligence Audit report on June 27 and called the special AGM of the bank -- established on March 3, 1995, as the 10th commercial bank -- for today.

NRB revokes action against financial institutions

Nepal Rastra Bank (NRB) has revoked the action against Nepal CSI Development Bank -- from July 15 -- after it increased its Cash Reserve Ratio (CRR) and injected fresh capital according to the directives of the NRB.

The central bank has imposed ban to collect deposits from August 20, 2006 and issued a slew of directives to improve its financial health. "The central bank has revoked its action against it after the financial health of the CSI Development Bank has improves," said the central bank.

The NRB had directed it to take Prompt Corrective Action on October 17, 2008.Similarly, the NRB has also revoked the action against Arun Finance and Saving after it also increased the minimum capital requirement. The NRB on October 17, 2008 banned it to take deposit and declared a problematic bank under the NRB Act.Similarly, the NRB has also allowed the suspended directors of the Bank of Kathmandu (BoK) to take part in the special annual general meeting (AGM) and file for candidacy for the directors. The special AGM is going to take place on July 22.Earlier, the NRB has suspended the BoK board after the controversial decision of its board to 'call back' Radhesh Pant from the post of managing director.

NRB urges police, RID, IRD to investigate NDB honchos

Nepal Rastra Bank (NRB) today formally requested the Nepal Police, Revenue Investigation Department (RID) and Inland Revenue Department (IRD) to thoroughly investigate into financial crimes involving the board of directors -- serving at different time till date -- of Nepal Development Bank (NDB), including the patron Uttam Pun and chairman Amar Gurung.
All of them have been accused of fraud, financial embezzlement and misuse amounting to a massive Rs 1.08 billion. The NRB has also sought for the Finance Ministry’s coordination in the investigation process.
“The troubled NDB board of directors, chief executive officers, advisors and managing directors — serving at different times — have not been abiding at all by directives of the central bank, risking the depositors and shareholders’ money, but benefitting themselves,” the central bank’s Supervision Department said in the letter to Police Headquarters written on Thursday. Similarly, the department also wrote to the RID and IRD to probe the source of income and banking transactions of Pun, Gurung and all other directors. The NRB Board had decided to take the help of police, RID and IRD on July 6.
The central bank also sought the Appellate Court’s approval to appoint liquidator to begin the liquidation process as the bank could not be revived and deserved to be sent to liquidation under Section 77 of the Bank and Financial Institution Act 2007. Before moving the Appellate Court, the central bank had also sought NDB’s clarification on why it should not be sent for liquidation. In response, the first development bank in the country could not furnish satisfactory clarification.
According to the NRB’s findings, the NDB has a huge loss of Rs 670.87 million, though it possesses a paid-up capital of Rs 320 million. It has total assets of Rs 730.13 million but its non-performing assets stand at 55.09 per cent and capital adequacy ratio is a whopping 48.31 per cent: that is almost five times more than the permissible limit of 11 per cent.
The NDB had Rs 720 million deposit of 32,000 depositors till mid-March. Of the total deposit, the bank has not been able to return Rs 330 million worth of institutional deposits of Employment Provident Fund and Nepal Army´s Welfare Fund even after expiry of maturity date. The EPF and Army’s deposit constitute around 45 per cent and 27 per cent of the total deposit, respectively.

Nepal Development Bank stares at liquidation

Nepal Rastra Bank (NRB) — the central bank — has moved Patan Appellate Court to press for liquidation of the troubled Nepal Development Bank (NDB).
If the Court decides in favour of NRB, then NDB will hold the unenviable record of becoming the first banking institution in the nation’s financial history to be liquidated.
Liquidation refers to the process by which a company — or part of a company — is disbanded, liabilities settled and subsequently the assets and property of the company is redistributed among shareholders.
A liquidator — in other words an officer who is specially appointed to wind up the company’s affairs — oversees the due process. The liquidator is legally empowered to act on behalf of the company in various capacities. S/he is primarily responsible to bring and defend lawsuits.
Other duties and responsibilities include collecting outstanding receivables, paying off debts, finishing corporate termination procedures and settling all claims ahead of the dissolution.
Stating that the bank could not be revived and deserves the liquidation as per Section 77 of the Bank and Financial Institution Act, 2007, the central bank sought Patan Appellate Court’s approval to appoint liquidator to begin the liquidation.
However, the court has the prerogative to take a decision that could seek an alternative if any party evinces interest to run the beleaguered institution.
NDB — Nepal’s first development bank that started its operations in 1998 — is ailing for many years. According to NRB’s findings, NDB has run up huge losses. Though it has a paid-up capital of Rs 320 million, the losses are pegged at Rs 670.87 million. While, it has total assets worth Rs 730.13 million. But, its non-performing assets stand at 55.09 per cent and capital adequacy ratio (CAR) is a whopping 48.31 per cent, which is almost five times more than the permissible limit.
In this light, the ill-fated financial institution has little chance of a revival, especially after Dreams Capital Ltd’s failed attempt to pump Rs 280 million to put it back in business. One of the negotiators, who were involved in the revival bid, said that the capital injection could restore CAR to the required level of 11 per cent.
But he has reservations about Uttam Pun — NDB’s patron — who has shares worth Rs 1.6 billion. Pun claimed to have resigned from his post and showed willingness to sell his shares after the Dreams Capital Ltd declined to invest because of his presence. Pun’s actions smack of escapism to evade legal action as he cannot sell his shares that have been frozen for transaction.
Association of Nepali Development Banks and the Association of Nepali Finance Companies had also lobbied hard with NRB not to liquidate NDB. However, the central bank had no option but to opt for liquidation.
Earlier, Sunanda Shrestha and his group had injected Rs 86.2 million. Shrestha also bowed out, thanks to Pun and his associates, who did not want to let go the management.
NRB had declared NDB an ailing institution on October 11, 2007. Over the years, NDB never followed the central bank’s regulatory obligations, instead frittered away depositors’ money. Had the NRB taken bold step at the outset, then less depositors would have been in trouble today.
Uttam Pun — the then executive chairman and promoter of NDB — repeatedly moved the Appellate Court, got a reprieve from the judiciary even as the unsuspecting public continued to deposit in his institution.
NDB got many opportunities from NRB but each time it tried to get away by furnishing abstract clarifications. On June 2, NRB had sought a clarification within 15 days, citing Clause 86 of Nepal Rastra Bank Act. NDB, in turn, submitted a capital plan on June 18, seeking time till
October 17 to improve its financial health. It claimed that given the opportunity, it could sell Rs 10 million worth shares and recover Rs 90 million deposit from Nepal Cooperatives as
instructed by NRB.
Under the circumstances, liquidation is the only corrective measure that a regulator can
restore to prevent further losses, putting paid to the bank’s hopes to operate with doctored balance sheets and misusing public
money.
Legal action also has to be taken against NDB’s management and promoters to send out a strong message that depositors’ sums are safe and central bank is capable of living up to its regulator’s role. However, the central bank has to ensure speedy handover of around 3,200 small depositors’ money.
Time is ripe for NRB to act tough to rein in tainted banks in an otherwise healthy banking
industry. It’s high time as well to ponder over setting up a national deposit insurer, which can insure deposits up to a certain limit.
Banking is one of the few sectors that has not only created jobs but also given a chance to the investors to operate in a transparent manner. However, the bad apples need to be weeded out to restore depositors’ faith that banks and financial institutions are the custodians of public money.

Suspended Bank of Kathmandu board members move court

Four of the suspended board members of the Bank of Kathmandu, along with chairman of the suspended board Sanjaya Bahadur Shah and one another board member on Tuesday filed two separate writ petitions at the Supreme Court against the decision of the Nepal Rastra Bank.
One of the members, who filed the writ petition, said the NRB's move to take over the bank's management under the NRB Act 2063 (Section 54) was 'unjustifiable' as the bank's financial health was sound and the interests of BoK's promoters and depositors were not at stake.
The central bank is empowered to take over the management of any financial institution under NRB Act 2063 (Section 54) if it is dissatisfied with the explanation it has sought.
The NRB took over the bank's management on May 19 to safeguard the interests of investors and promoters, which was 'allegedly' at stake due to growing dispute among the board members. The suspended board members cannot hold any position in any financial institution for another five years.
"The decision to call back managing director Radhesh Pant from his post was a majority decision," a board member argued, adding that majority of the board members could take the decision.
The central bank took the decision in an emergency board meeting on May 19 after it received two separate letters of clarification from BoK on May 17.
The crisis precipitated following the 313th board meeting of BoK on March 22, when it was decided to recall Pant from his post. Though the decision was taken by a majority of the board members, the disgruntled members had urged the central bank to intervene. Four directors took the decision against Pant, while the remaining two -- Sitaram Thapaliya and Sudarshan Poudel -- were against the decision.
Later, the disgruntled board members knocked on NRB's door. The central bank had sought explanation following a dispute over the BoK board's move to recall managing director Radhesh Pant from his post.
The NRB has suspended the BoK board and sent a four-member team, led by director Laxmi Prapanna Niraula, who will work with acting CEO Sabin Lal Shrestha. The NRB takeover is for a short period of three months. It will hand over the management to the new board members after the AGM within the next three months.
A board member, Deepak Narsing Shrestha -- who was not in the board meeting that took the controversial decision -- also filed separate writ petition against the NRB decision.

Central bank takes over Bank of Kathmandu

Nepal Rastra Bank (NRB) has decided to take over -- albeit "for a brief period" -- the reins of the Bank of Kathmandu (BoK). However, the central bank has given options to BoK as well.

"If the bank can convince us that it will work together for its betterment, then we can rethink on the move after three months," a NRB board member said after the meeting.

The central bank took the decision in an emergency board meeting this evening after it received two separate letters of clarification from BoK on Sunday. The central bank sought the explanation following a dispute over the BoK board's move to call back its managing director Radhesh Pant from his post.

The central bank is set to take over the management as per NRB Act 2063 (Section 54) since it was dissatisfied with the explanation furnished by the bank. As per the rule, if NRB is not convinced with the explanation, then it is empowered to take over the bank's management.

The bank, in turn, argued that the decision to call back Pant from his post of managing director was "an internal matter and a normal process."

The crisis precipitated after the 313th board meeting of BoK on March 22, where it was decided to call back Pant from his post. Though the decision was taken by a majority of the board members, the disgruntled ones urged the central bank to intervene.

Four directors -- two each from promoters and public -- took the decision against Pant, while the remaining two -- Sitaram Thapaliya and Sudarshan Poudel -- were neutral.

Later, the disgruntled ones knocked on NRB's door. They submitted a separate letter of clarification on Sunday as well.

A majority of shares of BoK -- established on March 3, 1995 as the 10th commercial bank -- is with the public. The promoters are only 42 per cent stakeholders.

This is the second instance that the central bank is taking over a commercial bank. Earlier, Nepal Bangladesh Ltd came under NRB's control in November 2006 due to financial irregularities. But this time the reason is different.

NRB move to curb market volatility

The Nepal Rastra Bank (NRB) today suspended margin lending on shares and loan renewal, apparently to curb speculative investment.
The directive, to be enforced from tomorrow, directs category A, B, and C financial institutions — commercial banks, development banks and finance companies respectively — to stop margin lending and renewal of loans against shares.
“The actual impact will be on the capital market but it will also hit those financial institutions whose portfolio of lending against shares is big,” said Radhesh Pant, managing director of the Bank of Kathmandu and president of the Nepal Bankers’ Association.
“The directive is aimed at stopping manipulation and insulating the stock market,” said National Planning Commission member Dr Posh Raj Pandey.
“If the market is not corrected, more stringent measures will be used.”
Chiranjivi Nepal, chairman of the Securities Board of Nepal, also agreed: “The directive is for market correction. The capital market is said to be fuelled by margin lending on shares that the banks provide subscribers against their shares.”
Since the financial institutions are more vulnerable due to margin lending, this directive could save them from a crisis and stabilise the capital market, Nepal said. “Nepse needs to be cut down to size. If the share market crashes after reaching a sky high, not only will the investors find themselves on the streets but it will also hit the financial institutions and the national economy ,” he said.
“The directive may bring some correction,” said stockbroker Rabindra Pradhan. The capital market, dominated by financial institutions, has recently posted a whopping growth and margin lending is attributed to Nepse’s 'abnormal rise'.
But some challenge this directive. “NRB cannot issue any such directive as it is against the Company Act,” said capital market analyst Rabindra Bhattarai. “Banks can lend on collateral, be it shares or anything.”
NRB’s Legal Department Director Dharmaraj Sapkota dismissed Bhattarai’s argument.“The Nepal Rastra Bank Act-2058, clause 79, gives the central bank special power to issue such directives in order to manage the monetary market," he said.