CIB blacklists NB Group

Credit Information Bureau (CIB) today blacklisted NB Group's chairman and family members as they have failed to pay back loans taken from Nabil Bank.

The bureau has blacklisted NB Group’s chairman Jit Bahadur Shrestha, dircetor Laxmi Bahadur Shrestha, managing director Jen Shrestha, Anar Debi Shrestha and Purna Bahadur Shrestha for defaulting on loans taken from Nabil Bank worth Rs 150 million by the NB Group for Kathmandu Recreation Center, Siddhi Ganesh Investment, and Shangrila Investment and a personal loan by Jen Shrestha

Jit Bahadur Shrestha is also the chairman of NB Insurance and board member of Nepal Bangladesh Bank (NBB). Likewise, Laxmi Bahadur Shrestha and Jen Shrestha are also in NB Insurance’s board. All three are now ineligible to hold the positions by default following the blacklisting according to the regulatory guidelines.
Their passports will also be seized by the government to stop them from leaving the country.
The central bank had had also penalised Laxmi Bahadur Shrestha with a fine of Rs 500,000 two months back for his involvement in unlawful borrowing and writing back of loans from Nepal Bangladesh Bank. Following the penalty, he had to step down from the bank’s board.

According to central bank loans worth Rs 20.08 million were provided to former Federation of Nepalese Chambers of Commerce and Industry (FNCCI) then president Chandi Raj Dhakal and Prakash Raj Ghimire without any collateral in the final week of the merger of Nepal Bangladesh Bank with Nepal Sri Lanka Merchant Bank and Finance.
“They had received loans from the finance company a week before the central bank’s final nod to merge with NB Bank. The company violated the banking norms had extended more amount although the loanees had demanded just Rs 20 million.
The Central Investigation Bureau (CIB) under Nepal Police had arrested Nepal Sri Lanka Merchant Bank and Finance Company former directors for loans worth Rs 90 million to Alka Hospital just before the merger with NB Bank.
That left the finance company with no cash and other resources, even affecting the financial health of NB Bank that was slowly emerging from a crisis. Right after the merger, NB Bank’s capital adequacy ratio fell below the required 10 percent as the bank absorbed the liabilities of the finance company worth Rs 800 million. Earlier, a proposal was floated to the board of the central bank for sending the NSLMB into liquidation. “But two NRB directors, whose tenure has recently been completed, refused the proposal that saw the proposal on hold for a month,” said the NRB source.

CIB nabs ex-director trio of Nepal Sri Lanka Merchant Bank and Finance

Police yesterday arrested three former directors of Nepal Sri Lanka Merchant Bank and Finance – that has already been merged with Nepal Bangladesh Bank – for financial indiscipline in the finance company.

They have caused some Rs 353.1 million loss to the company by flouting central bank directives while disbursing loans at a time when the finance company was about to merge with Nepal Bangladesh Bank.

The Central Investigation Bureau (CIB) of Nepal Police has nabbed the finance company’s former executive chairman Rubi Joshi and former directors Sri Ram Prasad Lamichhane and Gaurishankar Chaudhary.

DSP Umesh Raj Joshi said that Patan Appellate Court today allowed the Metropolitan Police Range, Hanuman Dhoka to keep them in police custody for additional 10 days for further investigation into their alleged financial crime.

The central bank had asked the police to arrest the trio on October 1.

Promoted by NB Group, the finance company was merged with Nepal Bangladesh Bank in 2011.
Police said the finance company’s top management lent without any collateral except personal guarantee and the loans were defaulted.
Promoter NB Group has breached the Bank and Financial Institution Act and kept their shares as collateral to borrow from their own finance company, inflicting a huge loss to the financial institution.

CIB blacklists NB Group MD Laxmi Bahadur Shrestha

Credit Information Bureau (CIB) has blacklisted managing director of NB Group Laxmi Bahadur Shrestha for not paying Narayangarh-based Shubhechchha Bikas Bank’s loan.
Shrestha issued a check of an account that did not have sufficient balance in the account and the cheque was bounced.

Once a person is blacklisted, he/she will be ineligible to be in any banks and finance company’s board member. Similarly, if a person is fined by the regulator, he/she is also ineligible to be in the banks and financial institutions board or insurance company. 
After the blacklisting, Shrestha will also have to resign from the board of NB Insurance, according to the Insurance Board’s regulation.
The central bank and the Insurance Board, both, regulations bar the blacklisted person or the firm to hold any position in the banks and financial institutions, and insurance company’s board.
Shrestha was also fined earlier Rs 500,000 for misappropriating fund of the Nepal Bangladesh Bank’s (NBB), where he was one of the board members. Following the fine, he has resigned from the bank’s board of director.
The NB Group that promotes NCC Bank and National Hydropower apart from Nepal Bangladesh Bank has been in news for all the wrong reasons lately.
Nepal Rastra Bank (NRB) has recently also identified Shrestha as one of the promoters involved in embezzlement of over Rs 1 billion from Nepal Bangladesh Bank´s coffer.
Similarly, the NB Group promoted National Hydropower has also not been able to hold its annual general meeting since last three fiscal years and the board members are divided into two groups, one group is for holding AGM whereas the other group led by Shresthaais against the AGM. However, Shrestha is no more in the National Hydro board as he has already ben blacklisting.

Oberoi Hotels sells Soaltee Hotel stake

Oberoi Hotels has sold its all shares in Soaltee Hotels.
Shivakrim Land and Industries of industrialist Ravibhakta Shrestha bought 1,020,144-unit shares of the Oberoi Hotel on the secondary market for Rs 142.8 million at the price of Rs 140 per unit share. The former president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Shrestha is also incumbent director of the board of Soaltee Hotels.
Oberoi Hotels had 6.84 per cent share in the Soaltee Hotels that has a total of 14,924,063 unit shares listed at Rs 10 face value in the Nepal Stock Exchange (Nepse).
The shares were transferred at Rs 140 per unit under Sale and Purchase Agreement (SPA) reached between the buying and selling parties on September 14.
The trading was done through a separate Block Share Trading window of Nepse's Automated Trading System. It is the first time such type of block share trading has undertaken in the Nepse. The window allows the investor to purchase bulk amount of share at less than the market price.In the market the shares of Soaltee were being traded for Rs 186 per unit.
"Soaltee's previous day closing was at Rs 186 but the stock exchange allowed the transaction to be undertaken at Rs 140 per unit share," informed chief executive of Nepse Shanker Man Singh.
"The transaction was undertaken only after the approval of concerned regulators like Securities Board of Nepal (Sebon), Nepal Rastra Bank (NRB) and Department of Industries (DoI)," he pointed out.
The provision is supposed to facilitate the foreign investment involved in the Nepali public companies to take back their investment without any difficulty.
"Despite the lower trading price for the transaction the market price will not be affected as for regular transaction the quoted market price will be applied," explained Singh.The hotels' subgroup index remained at Rs 384.85 points today in spite of the transaction. The hotel subgroup has 38,878,061-unit shares of four listed hotels at the Nepse with a paid up value exceeding Rs 2.5 billion. Taragaon Regency Hotel owns more than 16.5 million units of shares making it the largest listed hotel in the secondary market. Similarly, Soaltee Hotel has 14.9 million units of shares worth around Rs 2.80 billion at the current market price. Among all four listed hotels Soaltee Hotel is the most active one on the floor. After today’s transaction, the Hotel is a completely Nepali owned except for 10 per cent of Holiday Inn, an Indian group.
Solatee posted profit of around Rs 110 million in the last fiscal year and employees 700. Yak and Yeti Hotel and Oriental Hotels have got their 2.2 million unit shares and five million unit shares listed at the Nepse, respectively.

NBBL merger?
KATHMANDU: Nepal Stock Exchange (Nepse) will not halt or suspend the trading of Nepal Bangladesh Bank shares until its acquisition by IFIC Bank of Bangladesh goes into formal procedure. "The banks have only signed Memorandum of Understandings that is not legally binding, if the bank formally starts the process with the central bank then only Nepse will halt the trading," explained chief executive of Nepse Shankar Man Singh. Nepal Bangladesh Bank's share trading was halted last week when the rumours did round about the bank's 51 per cent stake to be acquired by one of the promoter’s IFIC Bank of Bangladesh. The trading resumed once the bank denied any knowledge regarding the matter. However, on Monday, the bank retracted its version and forwarded the information regarding the proceedings of IFIC Bank to Nepse. According to the information provided IFIC Bank will acquire 15 per cent of shares owned by another Bangladeshi bank Bank Asia Ltd and 26 per cent shares of different promoters. "We have put all the information regarding the matter on our website for the investors to make decision whether they want to buy its share or not," he explained. “However, given the track record of the promoters of the Nepal Bangladesh Bank, NB Group of Laxmi Bahadur Shrestha and Jeet bahadur Shrestha, there is very less possibility of any progress on the issue,” according to the market pundits.

Anti-Money Laundering case gone wrong

A man claims 'illegal money' in the US Court, dupes Nepal's finance ministry, foreign ministry and central bank easily and 'gets away' with $1 million, almost.
Its not the case of poor communication between the authorities rather a case of how deep the coruption is rooted in the bureaucracy and how one can 'influnce' the ministries and even the central bank.
Though, the central bank is still silence on the issue, the finance ministry has asked the Nepali embassy in Washington to get the detailed information on the case and forward the report to the US Court that the ministry sent today through courier.
The US Court had asked central bank and finance ministry on the claim of Asim Khatri Chhetri (KC) but the responsible authorities never received the letter.
"It proves that strong lobbying of KC inside the central bank and finance ministry," a senior central bank official said, adding that the letter never reached central bank governor or finance secretary but made its way back to the US Court that gave verdict on the basis of the
However, today the ministry has directed Nepali embassy in washington DC to hold talks with the US authority and clarify the government's stand on the case that is a clear case of money laundering.
In his petition to the US Court, KC had sought retrieval of the money he paid to Wu Lixian, a Chinese national for supplying logistics to the Nepal Army and Nepal Police.
The money was received in 2008 by Nepal Bangladesh Bank, Bhaisepati branch in the account of Chinese national Wu. But the bank suspecting something fishy reported the central bank instead of paying it to him.
"Neither the purchase has been made in Nepal nor the goods were delivered in Nepal," the finance ministry said, adding that the money has been however transferred to Nepal in a Nepali bank. "It is a clear case of Anti-Money Laundering but handled in a most unfortunate way."
But, this time around KC has 'almost' received the money after the US Court in New York issued a verdict in his favour two weeks ago.
Based on the court's verdict, Chase Bank that made the payment on July 14, 2008 had deducted $1 million from an account of Nepal Rastra Bank in New York to make the payment.

Revenue and Anti-Money Laundering Department gets cases
KATHMANDU: After the Anti-Money Laundering Act came into effect, the Revenue and Anti-Money Laundering Department has investigated 62 case. "Of them, three are finalised," said Mahesh Prasad Dahal, director general of the department. "Of the three also, one was fined Rs 600,000 as he could not provide the source of income of Rs 300,000," he said, adding that the remaining two got clean chit from the Special Court.

Commercial banks push Nepse up

The commercial banks -- a key player in the secondary market -- again pushed the Nepse up by 2.58 points to 630.55 points from the Sunday morning's 627.97 points.
However, of the nine sub-groups -- two sub-groups manufacturing and hotels -- like last week did not see any transaction. The week started in the green and continued till the fourth day as the secondary market was opened for the four days only this week.
This week, Standard Chartered bank Nepal topped the chart in terms of transaction amount as its shares were traded at Rs 70.40 million. Paschmanchal Bikas Bank followed with Rs 27.56 million, and Laxmi Bank (with Rs 18.88 million), Nepal Bangladesh Bank (with Rs 15.41 million) and Nepal SBI Bank (with Rs 12.95 million) managed to come in the top five slot, respectively.
In terms of number of share units traded, Pashimanchal Bikas Bank topped the chart with 77,000-unit shares changing hands while in terms of number of transactions Lumbini General Insurance topped the chart with 311 transactions.
The transaction amount decreased by 42.84 per cent to Rs 254.31 million against last week's 9.46 percent loss to Rs 438.11 million.
However, Group-A companies' contribution increase to 60.42 per cent to Rs 151.3 against last week's 48.75 per cent whereas the 78-scrip sensitive index -- a barometer of Group-A companies -- gained 1.28 points to 161.80 points from Sunday's 160.52 points. The float index -- calculated on the basis of real transactions -- also rose by a mere 0.27 point to 59.97 points.

Shareholders loose this week, too

Shareholders of hydropower companies, commercial banks, finance companies, trading firms, development banks and insurance companies lost this week, pulling Nepse down by 16 points to 700.01 points from its opening 716.01 points on Sunday.
However, investors might get temporary confidence and the shares of existing banks and financial institutions might flare due to Nepal Rastra Bank's new policy of putting a temporary halt to the issuance of licences to Group A, B and C banks and financial institutions. Nepse has over 85 per cent dominance of banks and financial institutions.
Hydropower companies, commercial banks and finance companies sub-groups lost heavily with their indices plunging by 29 points to 948.19 points from Sunday's opening of 977.19 points, 24.07 points to 728.26 points from Sunday's opening of 752.33 points and 14.16 points to 678.41 points from Sunday's opening of 692.57 points, respectively.
The trading sub-group also lost 8.57 points to dip to 281.78 points from the opening 290.35 points, whereas development banks sub-group lost 7.33 points to drop to 741.15 points from the opening 748.48 points. The insurance sub-group slid by 5.07 points to 646.24 points from the opening 651.31 points.
Of the nine sub-groups, two -- manufacturing and hotels -- did not see any trading this week but the others sub-group became the only gainer this week with a 1.17-point gain to rise to 670.86 points from Sunday's opening of 669.69 points.
The transaction amount also decreased by 44.29 per cent to Rs 263.38 million against last week's Rs 472.82 million.Of the total transactions, Group-A companies contributed 46.75 per cent. The 78-scrip sensitive index -- a barometer of Group-A companies -- lost 5.49 points to drop to 184.97 points from the opening 190.46 points. The float index -- calculated on the basis of real transactions -- also skidded down by 1.94 points to 67.22 points from the opening 69.16 points.
This week Citizens' Bank International (with Rs 21.42 million) topped the chart in terms trading amount followed by Nepal Investment Bank (with Rs 20.69 million), Bank of Asia Nepal (with Rs 17.06 million), National Hydropower Company (with Rs 16.30 million) and Nepal Bangladesh Bank (with Rs 14.55 million).
In terms of number of share units traded, National Hydropower Company topped the chart with 1,73,000-unit shares changing hands while in terms of number of transactions Bank of Asia Nepal topped the chart with 460 transactions.

Nepse misleads
KATHNMANDU: Nepse is misleading. It does not include Sunday's index when it calculates from Sunday's closing to next Friday's opening. Sunday being the first day should be included in the index calculation for correct data. This week, the index plunged by 16 points to 700.16 points from the opening of Sunday morning's 716.01 points. But according to Nepse, it dropped by only 4.70 points because Nepse did not calculate the drop of Sunday's 11.30 points from the opening of Sunday morning's 716.01 points. Nepse said that the transaction was calculated from Friday (July 31) to Tuesday (August 4) as the stock market remained closed on Wednesday and Thursday which were public holidays. This week, Nepse witnessed trading on three days only -- Sunday, Monday and Tuesday -- instead of its regular five days -- Sunday to Thursday. But Nepse did not -- as always -- calculate Sunday's trading points and calculated only two days -- Monday and Tuesday -- and producedmisleading figures. Since its inception, Nepse has been providing misleading information.

Nepse defies popular market belief

Contrary to the popular belief that decrease in capital gain tax will push the Nepse high up, the Nepse this week posted a marginal growth of 1.97 points to 737.84 points from last week's closure of 735.87 points. Though the capital gain tax is one of the reasons that hit the growth of capital market, it is not the major one.
The transaction amount has also increased by a minimal 3.52 per cent to Rs 407.91 million against last week's Rs 394 million. Last week -- after the budget -- the Nepse gained 32.99 points against 35.45 points a week earlier.
However, the shareholders of commercial banks and finance companies sub-groups gained as these two sub-groups gained 18.19 points to 782.67 points and 7.17 points to 699.36 points respectively. The remaining -- development banks, insurance companies, trading, hydropower companies, others and hotels -- sub-groups lost except the manufacturing sub-group that did not witness any trading this week.
The hydropower companies and others sub-groups plunged by 37.36 points to 980.07 points from last week's closing of 1028.43 points and 37.58 points to 687.31 points from 724.89 points putting a break to Nepse's last two weeks impressive growth.
The sensitive index -- the barometer of Group-A companies -- gained 2.59 points to 197.77 points from last week's closing of 195.18 points. Last week, the 78-scrip sensitive index had flared by 7.09 points to close at 195.18 points.
Similarly, the float index -- calculated on the basis of real transactions -- also gained 1.07 points to 71.15 points from last week's closing of 70.08 points.
This week Nepal Bangladesh Bank (with Rs 44.04 million) topped the chart in terms trading amount followed by Bank of Kathmandu (with Rs 35.27 million), Nabil Bank (with Rs 28.71 million), Standard Chartered Bank Nepal (with Rs 28.01 million) and Nepal Investment Bank (with Rs 26.63 million).
In terms of number of share units traded National Hydropower Company topped the chart with 1,68,000-unit shares changing hands and in terms of number of transactions Citizens Bank International topped the chart with 561 transactions.

Monetary Policy offers nothing
KATHMANDU: Monetary Policy has neither good nor bad news for the investors. The closely watched policy document announced yesterday by Nepal Rastra Bank (NRB) could have a huge impact in the Nepse as the domestic capital market has over 85 per cent contribution of banks and financial institutions. But the Monetary Policy didnot increase the paid-up capital -- as expected by some investors -- of the banks and financial institutions. "The limit of minimum level of paid up capital has been kept unchanged," the Monetary Policy said adding that nowonwards, the base for increasing capital of licenced banks and financial institutions by the NRB will be their capital fund. The capital fund includes core capital and supplementary capital. The minimum level of paid up capital -- that is kept unchanged according to the policy -- is Rs 2 billion for commercial banks, Rs 640 million for development banks and Rs 200 million for finance companies. Only a couple ofbanks like Nepal Investment Bank and Kist Bank has already increased their minimum level of paid up capital but remaining commercial banks yet have to increase their paid up capital by the end of 2010.

Warren Buffett to star in cartoon
NEW YORK: The so-called Sage of Omaha, Warren Buffett, is a billionaire, a philanthropist, a stockpicker and an author. In a new turn, the wily 78-year-old investor will shortly add cartoon star to that list. An animated version of Buffett will teach children about finance in a series called The Secret Millionaires Club, to be created by internet empire AOL and media firm A Squared Media. Episodes lasting three to five minutes will appear on AOL before being distributed across the web via social networking sites. The world's second richest man is in august company. Others featuring in cartoons as part of the same project include the supermodel Gisele Bundchen, who plays a superhero protecting the environment, and Martha Stewart, who will educate viewers in cooking, craft, gardening and creating 'unforgettable' events. Nebraska-based Buffett has built a vast army of US followers who admire his flair for picking successful investments and acquisitions. Hisfortune is estimated at $37 billion, second only to Bill Gates's $40 billion, in Forbes magazine's annual ranking of the world's richest people. Buffett said the credit crunch was a reminder of the need to teach children about money, "What better time to help educate our kids about financial responsibility." It has been a tough year for Buffett. His Berkshire Hathaway investment company suffered a rare drop in its asset value during 2008, partly due to what Buffett admitted were 'dumb' choices. It recently lost its triple-A credit rating and its shares have slipped by 18 per cent over the last 12 months. -- The Guardian

Shareholders cheer up as Nepse looks up

The shareholders of all the major sub-groups -- commercial banks, development banks, finance companies, hydropower and others -- gained this week as these sub-groups propelled the Nepse to 702.88 points. The Nepse surged by 35.45 points to 702.88 points from last week's closing of 667.43 points in a week after a long spell of bearish trend. The investors looked hopeful that the budget would bring some relief to them like the capital gain tax would come down to 10 per cent from the present 15 per cent.
The shareholders of commercial banks and development banks sub-groups posted a whopping gain as they gained 51.54 points to 736.57 points and 44.31 points 744.66 points in five day trading this week.
Similarly, the contribution of Group-A companies -- the blue-chip shares in the domestic market -- also increased to 44.36 per cent against week's 24.69 per cent. However, the transaction has decrease by 17.36 per cent to Rs 382.31 million against last week's increase of 103.88 per cent to Rs 462.61 million.
The 78-scrip sensitive index also flared by 10.73 points to 188.09 points from last week's closing of 177.36 points. The float index -- calculated on the basis of real transactions -- also gained 3.38 points to close at 67.47 7points from last week's closing of 64.09 points.
This week Nepal Bangladesh Bank (with Rs 62.37 million) topped the chart in terms trading amount followed by Bank of Kathmandu (with Rs 36.86 million), NIC Bank (with Rs 36.85 million), IME Finance (with Rs 19.59 million) and National Hydropower company (with Rs 18.92 million).
In terms of number of share units traded and transaction amount Nepal Bangladesh Bank topped the chart with Rs 62.37 million transaction of 2,49,000-unit shares changing hands, while Pashupati Development Bank topped the chart in terms of number of transactions with 895 transactions.

Transaction amount goes up, Nepse down

The contribution of Group-A companies -- the blue-chip shares in the domestic market -- dropped to 24.69 per cent from last week's 50.86 per cent. However, the transaction has gone up by 103.88 per cent to Rs 462.61 million against last week's decrease of 1.76 per cent.
The Nespe also lost 3.18 points to 667.43 points from last week's closing of 670.61 points. The 78-scrip sensitive index lost 1.54 points to 177.36 points from last week's closing of 178.90 points. The float index -- calculated on the basis of real transactions -- also shed 0.19 points to close at 64.09 points.
The shareholders of the commercial banks, development banks, finance companies and insurance companies lost while the hotels, hydropower and trading sub-groups' share holders gained this week. The manufacturing sub-group did not see any transaction of its shares but others sub-group -- that has Nepal Telecom shares under its belt -- after the plunge it recovered to close at 646.19 points -- the closing of last week.
This week NCC Bank (with Rs 98.30 million) topped the chart in terms trading amount followed by National Hydropower (with Rs 87.89 million), Nepal Bangladesh Bank (with Rs 63.83 million), Bank of Kathmandu (with Rs 17.02 million) and Standard Chartered Bank Nepal (with Rs 15.53 million).
Similarly, in terms of share units traded National Hydropower topped the chart as its 9,82,000-unit of shares changed hands. But in terms of number of transactions, Pashupati Bikas Bank topped the chart with 604 transactions.

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.

Nepal at 121st position in the Corruption Perception Index

Nepal ranks at the bottom 121st position on the Corruption Perception Index (CPI) 2008 published by Transparency International.
Nepal scored 2.7 in 2008, slightly above than in 2007 when it had scored 2.5. Countries scoring below three – out of the total 10 -- are said to be in rampant corruption.
"To improve Nepal's grading and atleast score above three is our goal," said CIAA acting chief commissioner Lalit Bahadur Limbu during an interaction between the financial institutions and Commission for Investigation of Abuse of Authority (CIAA) here today.
To improve the score the private sector must be brought into the net of CIAA, he said adding that to improve Nepal's grading the private sector -- especially financial institutions -- must be more transparent and self-regulated.
"However, a highly developed country like the US also failed in maintaining financial discipline -- which brought about the recent global crisis -- so how can Nepali financial institutions self-regulate?" said central bank governor Dipendra Bahadur Chhetri. "The global financial crisis is the result of failure of self-regulation in US financial institutions," he said adding that Nepali financial institutions should be more vigilant. "One of the measures could be maintaining a Code of Conduct," he said.
"To self-regulate, please maintain a Code of Conduct," CIAA acting chief commissioner Limbu also said.
The anti-corruption body organised the interaction to inform financial institutions on the convention -- that is going to be ratified by the parliament in the next session -- to give more teeth to the CIAA to act against private financial institutions also.
"There are lots of complaints against private banks also and the private sector will also be brough into the net of the CIAA after the convention is ratified," he said.
"The financial institutions -- custodians of public deposit -- should be more self-regulated," Bed Prasad Siwakoti, commissioner at the CIAA said hailing the bankers' efforts at self- regulation.
On the occasion, the bankers informed of their institutions' Code of Conduct and initiatives of Nepal Bankers' Association (NBA). The banking sector is considered one of the most transparent sectors in Nepal, though it has still to pass a lot of tests.
Nepal Rastra Bank (NRB) took Nepal Bangladesh Bank (NBB) under its control to safeguard the public deposit. It is one of the best examples of how lack of self-regulatory mechanism hurts a financial institution and puts public's money in danger.