Government may interfere in interest rate

The government could interfere in the banks to force them to bring down interest rates, if necessary, according to finance minister Dr Yub Raj Khatiwada.
Addressing a programme mark to celebrate 10th  anniversary of National Banking Institute (NBI) today in the valley, he said that profiteering is good but it should be in the limit. "The banks and financial institutions should refrain from making excessive profits," he added.
The government is under pressure from the private sector to lower the interest rates. Prime Minister KP Sharma Oli has yesterday directed Khatiwada to talk to bankers on interest rates.
However, speaking at the same programme, Nepal Bankers Association (NBA) president Gyanendra Dhungana said that it is not possible to bring down the interest rate to single figure. "Industrialists should not be very optimistic about lower interest rates as the base rate of the banks stands at 10 percent," he added. According to the central bank rule, the banks and financial institutions can add upto 5 per cent in the base rate while lending.
Khatiwada, on the occasion, further said that the country is in need of carrying on the agenda of good governance, high integrity, and greater banking efficiency through the best service at the least cost possible by leveraging resources in the most productive areas.
Likewise, central bank governor Dr Chiranjivi Nepal called for a massive transformation in traditional payment system due to advancement in technology. He also highlighted the needs for providing better, affordable services to customers as well as service automation in quest of higher efficiency and risk management
Dr Khatiwada and Dr Nepal jointly inaugurated the programme, where NBI also hosted a Banking Conclave with the theme 'Deliberation for the next Decade'. Some leading banking professionals including MD of State Bank of India Dinesh Khara, MD and CEO of IDFC Bank V Vaidyanathan, Banking expert and Independent Director of State Bank of India Sanjiv Malhotra, Treasurer of HDFC Bank Ashish Parthsarathy, CEO of Foreign Exchange Dealers Association of India (FEDAI) Ashwani Sindhwani and the renowned business journalist from India Tamal Bandyopadhyay spoke on the occasion.
NBI is collectively established by the central bank and Nepal Bankers’ Association with support from Asian Development Bank (ADB) and the government.

MDBs announce joint framework to combat climate change

Multilateral Development Banks (MDBs) today announced a joint framework for aligning their activities with the goals of the Paris Agreement, reinforcing their commitment to combat climate change.
In a joint declaration, the MDBs committed to working together in six key areas considered central to meeting the goals of the agreement, which aims to limit the increase in global temperatures to well below 2°C, pursuing efforts for 1.5°C.
The declaration was issued at the start of the 24th Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24) in Katowice, Poland.
"The global development agenda is at a pivotal point," the joint declaration reads. "There is international consensus on the urgent need to ensure that policy engagements and financial flows are consistent with a pathway towards low greenhouse gas emissions and climate-resilient development."
The MDBs and the International Development Finance Club (IDFC) had already pledged in December 2017 to align financial flows with the objectives of the Paris Agreement.
"To realise this vision, we are working together to develop a dedicated approach," the joint MDB declaration adds.
The MDBs plan to break their joint approach down into practical work on six core Paris Alignment areas – the building blocks – including: aligning their operations against mitigation and climate-resilience goals; ramping up climate finance; capacity building support for countries and other clients; plus an emphasis on climate reporting.
This approach builds on the ongoing MDB contribution to climate finance, which, in 2017, amounted to $35 billion to tackle climate change in developing and emerging economies, while mobilising an additional $52 billion from private and public sector sources.
The MDBs will report back to next year’s COP25 gathering on their progress under the six building blocks.
The nine MDBs includes the African Development Bank Group, the Asian Development Bank, the Asian Infrastructure Investment Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank Group, the Islamic Development Bank, the New Development Bank, and the World Bank Group (World Bank, IFC, MIGA).

MDBs increase 2016 financing to tackle climate challenge, South Asia gets largest chunk

The world’s six largest multilateral development banks (MDBs) continued to make a strong contribution to the global climate challenge in 2016, increasing their climate financing in developing countries and emerging economies last year to $27.4 billion from $25 billion in 2015.
Of the total, $21.2 billion or 77 per cent was dedicated to climate mitigation finance, with the remaining 23 per cent devoted to climate adaptation.
Combined with additional co-financing from other investors, the total amount of finance mobilised for climate action reached $65.3 billion last year.
The MDBs have reported jointly on climate finance since 2011. Collectively, the banks have committed over $158 billion in climate finance during the past 6 years.
The latest MDB climate finance figures are detailed in the 2016 Joint Report on Multilateral Development Banks’ Climate Finance, combining data from the African Development Bank, the Asian Development Bank (ADB), the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank Group, and the World Bank Group.
"ADB acknowledges MDB’s pivotal role in providing climate finance and remains committed to strengthen its collaboration with other MDBs and ultimately to the successful implementation of the Paris Agreement,” ADB vice president for Knowledge Management and Sustainable Development Bambang Susantono said, adding that the ADB has recently approved its Climate Change Operational Framework 2030, which will guide in enhancing resilience and strengthening climate actions in the Asia and Pacific region.
Broken down by region, the largest share of last year’s MDB climate finance went to South Asia, with 20 per cent, followed by East Asia and the Pacific and non-EU Europe and Central Asia, with 19 per cent and 18 per cent, respectively. The Middle East and North Africa, at 9 per cent and Sub-Saharan Africa, at 7 per cent, received the least climate finance.
The MDBs also reported again on climate finance according to financial instrument. The vast majority of finance, or 73 per cent, was provided in the form of investment loans.
The MDBs’ methodologies for climate finance tracking align with the Common Principles for Climate Change Mitigation Finance Tracking, jointly agreed by the MDBs and by the International Development Finance Club (IDFC), and first published in March 2015.
The MDBs and the IDFC agreed on the Common Principles for Climate Adaptation Finance Tracking in July 2015. The MDBs and the IDFC have begun taking the next steps to harmonize their approaches in tracking adaptation finance.
The MDBs are continuing to work to update their joint tracking methodologies for mitigation and adaptation to support the goals of the Paris Agreement, playing a key role in defining the finance flows consistent with a pathway towards low greenhouse gas emissions and climate resilient development.
ADB – based in Manila – is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members, 48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in co-financing.