Banks rollout CorporatePay

 Citizens Bank and Nepal Bank entered into an agreement with Nepal Clearing House Ltd (NCHL) to roll out CorporatePay system as a business payments platform. The more banks are using the CorporatePay platform provided by the NCHL. The system will facilitate the bank’s business customers for initiating digital transactions directly from its bank accounts, according to chief executive officer (CEO) of NCHL Neelesh Man Singh Pradhan.

The banks will provide their business customers with digital platform of CorporatePay that will be used by the businesses to initiate various payment transactions including fund transfer, salary payments, vendor or party payments, government payments and other service payments. “The payments could be bulk or individual with beneficiary credit on real-time or non-real time basis, depending on whether the transactions are processed through connectIPS or NCHL-IPS clearing systems,” Pradhan said, adding that the customers will need to request the bank for enrollment to avail the service, and after the necessary due-diligence, an access to the system is provided based on the approving authority of the users of such institution. “The transactions will then be managed completely by the business institution without manual intervention of the bank within a transaction limit and above the limit it has to be additionally approved by the bank.”

The system also provides a secured mechanism of multi-layer authentication to access the system with multiple approvals for transaction authorisation based on the approving authority provided by the institution. “It also provides facility to link other bank accounts also, through respective banks, that make the CorporatePay system a truly a multi-banking single platform for the business customers,” Pradhan added.

Citizens Bank, and Nepal Bank started this digital platforms for the customers, and others will follow the suit. “With addition of CorporatePay, the banks will help their business customers to digitise their transactions to improve their service delivery, as the need for the customers to approach bank branches will be largely reduced, once the system is fully rolled out,” he said.

South Asia’s handling of Covid-19 crisis portends a dire situation for the region’s response to climate change crisis

 South Asia’s handling of Covid-19 crisis reveals a dysfunctional regional cooperation mechanism to deal with the trans-boundary crisis implying a need for a revitalized regional cooperation to deal with the climate crisis, according to the experts in a virtual meeting organised by South Asia Watch on Trade, Economics and Environment (SAWTEE) in association with Biruni Institute, Afghanistan; Centre for Policy Dialogue (CPD), Bangladesh; Research and Information System for Developing Countries (RIS), India; Sustainable Development Policy Institute (SDPI), Pakistan; and Institute of Policy Studies of Sri Lanka (IPS).

They also emphasised that Covid-19 has diverted efforts away from climate action, which, if not corrected, will have devastating consequences for the region that remains highly vulnerable to the detrimental impacts of climate change.

On the occasion, former member of the National Planning Commission (NPC) Dr Prabhu Budhathoki highlighted that the current pandemic has made it crystal clear that the regional cooperation mechanism in South Asia does not function well at the time of crisis and hence our governance mechanism has to change, if we are to wage an effective fight against the climate change.

Likewise, deputy director general at the International Centre for Integrated Mountain Development (ICIMOD) in Kathmandu Dr Eklabya Sharma, delivering the keynote speech, emphasised that South Asia, primarily given the significant presence of mountain regions, is one of the most vulnerable regions when it comes to climate change. “Higher population density and the presence of large number of impoverished populations exacerbate the vulnerabilities in the region,” Dr Sharma said, adding that the dire effects of climate change are already visible in the region in the forms of increased occurrence of floods, glacial lake outbursts, landslides, heat waves, and a general degradation of the ecosystem. He also warned that a sole focus on Covid-19 at the expense of climate issues is the biggest challenge confronting the region.

Citing Pakistan’s experience in dealing with the Covid-19 crisis and lessons learnt through it, chair of SDPI in Islamabad and former deputy executive director at the United Nations Environment Programme (UNEP) Dr Shafqat Kakakhel highlighted four key elements – resilience to deal with disasters; institutional arrangement for domestic, regional, and international coordination; identification of the most vulnerable communities and rapid dispatch of support to them; and effective use of information technology and social media to inform people – that South Asia has to strengthen to deal with climate change. Referring to the past regional mechanisms like South Asia Co-operative Environment Programme (SACEP), Delhi Statement on Cooperation in Environment 2009, and Thimphu Statement on Climate Change, Dr Kakakhel mentioned that SAARC has had many initiatives to foster regional cooperation on climate change issues but poor implementation has rendered them inefficacious.

Research Fellow and head of Environment Economic Policy Research, Institute of Policy Studies of Sri Lanka Dr Athula Senaratne warned that Covid-19 impacts could crowd out the climate finance for several years and hence slow the developments that had gradually been building up in South Asia. He also pointed out that climate action is currently a peripheral issue in the region and until it becomes a mainstream issue we will not see effective collective responses to deal with the climate crisis.

“The current pandemic has highlighted the interconnected nature of global systemic risk and it has exposed significant vulnerabilities, including in food systems,” mentioned research fellow at the Centre for Agroecology, Water and Resilience of Coventry University in UK Dr Lopa Saxena. “To deal with the global crisis engendered by climate change, equitable, sustainable, healthy, and resilient food systems have to be developed, he said, adding that regional cooperation in local food production systems is vital for bringing about that change.

Discussing Bhutan’s successful response in containing the Covid-19 infections and managing socio-economic repercussions, dean of Academic Affairs, College of Natural Resource, Royal University of Bhutan Dr Tulsi Gurung emphasised the importance of leadership and governance in dealing with the crisis. “Addressing climate change would also require leadership that can unite citizens within the country and wage effective collaboration at the regional and global level,” he added.

SAWTEE – in association with other prominent think-tanks in the region – has been hosting a series of webinars from September 22 to October 16 to deliberate on various socio-economic aspects of the Covid-19 pandemic, how they relate to South Asia and what should be the future course of action for South Asian countries.

South Asia discusses impact of Covid-19 on tourism and revival strategies

 The travel industry veterans from South Asia agreed that in the new reality where there are severe barriers to long distance travel, the countries in South Asia should focus on promoting regional tourism to revive tourism.

They also suggested creating a regional body to work on the ease of travel between the countries in South Asia. Speaking during a a virtual meeting ‘Impact of Covid-19 on tourism and revival strategies of South Asian countries’ organised by South Asia Watch on Trade, Economics and Environment (SAWTEE) in association with Biruni Institute, Afghanistan; Centre for Policy Dialogue (CPD), Bangladesh; Research and Information System for Developing Countries (RIS), India; Sustainable Development Policy Institute (SDPI), Pakistan; and Institute of Policy Studies of Sri Lanka (IPS), Colombo.

Former minister of Tourism Yankila Sherpa and advisor of the Tourism Recovery Task Force (TRTF), delivering the keynote speech, noted how the first six months in 2020 have seen a 60 per cent fall in global tourist arrivals. Countries like Maldives and Nepal, the latter having faced closure of 2,600 trekking firms, are disproportionately impacted given the economic significance of the sector, she said, adding that regional collaboration, for instance, on smooth movement, destination infrastructure upgrade, testing and exploiting regional tourism potential like the Buddhist circuit, will aid in swift revitalisation of tourism in South Asia.  “The public-private mechanism is tasked with synergising efforts to revive the travel and tourism sector in Nepal.”

Sherpa, who is also part of Nepal’s Tourism Recovery Task Force (TRTF), also informed that the TRTF has come up with strategies such as Desh Darshan to promote domestic tourism in Nepal.

Likewise a widely regarded academic from the Indian Institute of Management, Bangalore (IIMB) Prof Rupa Chanda observed how each actor in the tourism value chain, from trekking firms, porters and guides, a significant proportion of which are in the informal sector, have been dealt a body blow by the pandemic. Prof Chanda suggested that while identifying and developing safe zones, including corridors, in the region, is a potential revival strategy, its effectiveness will hinge on whether Covid-19 safety rules are enforced. She added that several regulations need to be developed and credibly implemented.   

Bhutan has been among the least affected countries from the Covid-19 not just in the region but also globally. Yet, since its source markets have been ravaged by the pandemic, Bhutan‘s travel and tourism sector has been severely affected. Director-General at the Tourism Council of Bhutan Dorji Dhradhul, on the occasion, argued that with the pandemic, Bhutan’s low-volume high-value tourism strategy could be a model for other countries to follow. Dhradhul observed that potential revival strategies in the sector should seriously consider issues like personal safety and health and that tourists will travel only if they perceive that destinations are safe. On revival strategies, Dhradhul highlighted that the key steps in Bhutan have been development and upgrade of physical as well as digital infrastructure such as contactless payment, skilling of tourism sector workers into providing better services and promotion of domestic promotion.

Likewise, managing director at the Maldives Marketing and PR Corporation Thoyyib Mohamed emphasised that while revival of tourism is critical given its significance for the Maldivian economy, equally important is to avoid explosion of infection. Mohamed outlined how the island nation’s unique geography has enabled it to come up with strategic concepts like ‘one island, one resort’. The concept essentially means that each resort would be a self-contained facility which potentially minimizes physical contact with those outside the island.

On self-contained and isolated destinations, speakers from Bhutan and Nepal highlighted how rural mountainous areas could be a pull for tourists.

The past president of Tourist Hotels Association of Sri Lanka Srilal Miththapala discussed the Sri Lankan case, on the occasion. While the sector has been badly hit, domestic tourism remains open in Sri Lanka, he observed, suggesting that hotel certification schemes, wherein hotels are audited for adherence to Covid-19 safety protocols, have helped tourists as well as the government to minimize infection risks.

SAWTEE, in association with other prominent think-tanks in the region, has been hosting a series of webinars from September 22 to October 16 to deliberate on various socio-economic aspects of the Covid-19 pandemic, how they relate to South Asia and what should be the future course of action for South Asian countries.

MCC deal will be endorsed in winter session: Foreign Affairs Minister

The current winter session of the parliament is going to endorse the Millennium Challenge Corporation (MCC) grant assistance agreement.
According to foreign minister Pradeep Kumar Gyawali, the agreement with the US government will endorse the largest grant agreement related to the economic development of Nepal in the current session. “The then government led by the Nepali Congress had reached the agreement and as the government is an institution with unbroken inheritance rights there is no alternative to passing it even to enhance the credibility of the country's image in the international sector,” he said, clarifying about the MCC agreement in the National Concerns and Coordination Committee meeting – under the National Assembly – here today.
“As all the national parties have no differences regarding the MCC, it will be passed by the parliament,” Gyawali added.
After some of the standing committee members of the ruling Nepal Communist Party (NCP) raised serious concern over the MCC agreement’s link to the Asia Pacific Strategy (IPS), a debate has been started either to endorse it or not.
“MCC and IPS are different things,” he said, adding that it is not necessary to relate them together.
Claiming that the incumbent government is alert and serious regarding issues of national interest and concern, he said that doubt regarding the MCC is because of historic mistakes. “This is an agreement related to assistance by the American government in projects for the infrastructure development,” he said, adding that the conditions in the agreement, which have to be considered at the time of its signing, cannot be changed now. “The US assistance, following the successful peace process and achievement of political stability in Nepal, will give the country benefit of positive message worth billions.”
According to him, an independent and professional body has been set up in Nepal for the implementation of the MCC assistance and Nepal's authorised entity can audit its account too. A project worth $64 billion, including around $55 billion US assistance, has been pursued with the objective of developing physical infrastructure and expanding connectivity for eliminating poverty and backwardness in the Asia Pacific Region.
Nepal is – under the project – constructing a 400 kV electricity transmission line from Nanglebhare of Kathmandu to Butwal via Ratmate of Nuwakot and Tanahu, apart from, some road networks of strategic importance.

Nepal to seek clarification of relations between MCC and IPS

The ruling Nepal Communist Party (NCP) is backing off from its commitment and agreement to start implementation of the mega US grant project, and seeking clarification from the US on relations between Millennium Challenge Corporation (MCC) and Indo-Pacific Strategy (IPS).
Replying the members at the standing committee meeting co-chair of Nepal Communist Party (NCP) Pushpa Kamal Dahal today said that Nepal could accept US assistance under MCC compact programme after clearance from its relation with IPS, which some of the ruling party members think a military alliance to counter China – the northern neighbour – and Beijing’s Belt and Road Initiative (BRI).
Dahal said that Nepal could accept the MCC only after considering the strings attached to the programme, according to the NCP (NCP) standing committee member Beduram Bhusal. “We have to see how far the conditions of the MCC programme suit Nepal’s national interests,” Bhusal quoted Dahal as telling the committee. “Dahal said while Nepal should continue to enjoy its old and cordial relations with the US, it could not be part of any military alliance in the guise of any programme.”
Some of the standing committee members told the meeting that MCC is part of the IPS and hence Nepal should not accept it. They put pressure on the leadership and the government seeking clarity from the US on MCC, and its relations to IPS. “The IPS has been a subject of speculation among the political and diplomatic circles ever since foreign minister Pradeep Kumar Gyawali visited Washington last December,” they claimed.
Nepal became eligible for the MCC – announced in 2002 by US President George W Bush – in 2011 and signed the agreement in 2017. Though, the MCC compact was signed by Nepali Congress (NC) government of which the former Maoist party was a coalition partner, the ruling party – unified between former Maoist party and fomer CPN(UML) party – has been sharply divided about endorsing the US grant from the Parliament.
The implementation of MCC will start once the Nepal’s Parliament ratifies it. The MCC, however, did not pass during the previous House session because of the reluctance of then House Speaker Krishna Bahadur Mahara, though foreign minister Pradeep Kumar Gyawali assurance that MCC was not part of IPS. The government spokesperson and minister for Communication and Information Technology Gokul Baskota has – during his regular weekly press briefing – also claimed that the MCC will be ratified by the Parliament’s winter session that started yesterday. The opposing ruling party leaders did not believe even the Prime Minister KP Sharma Oli, who has also claimed that the MCC will be endorsed during the winter session of Parliament.
The US has announced that it will provide assistance of $500 million in grants to Nepal under the MCC programme over the next five years. Nepal has to invest more than Rs 13 billion – as a matching fund – for the programme. The grant will be used to construct the toad and transmission lines, for better connectivity. Nepal plans to use the grant to develop the 400-KV Nepal-India Butwal-Gorakhpur electricity transmission line and to upgrade some roads.
The US officials have repeatedly termed MCC an important initiative under the Washington-led IPS. The US officials including US envoy to Nepal Randy Berry have also time and again clarified that IPS is just a US ‘policy’ and it does not require or demand membership from anyone. But opposing leaders have been claiming that the MCC is part of the US military strategy IPS to counter China and Beijing’s influence.
The leaders, who are opposing the MCC, are also claiming that the provision – in the agreement – allowing only the US to terminate the agreement is faulty. “Nepal should include a provision allowing it also to terminate the agreement as the provision is against the spirit of equality between sovereign countries,” a standing committee member Bhim Rawal said, adding that Nepal should also be allowed to audit the accounts, which according to the agreement, is not allowed. Rawal – in the standing committee meeting – asked foreign minister Gyawali to seek clarification from the US, if the grant is provided as a part of the IPS.
The ongoing debate over the MCC, according to the experts, is nothing but ‘the best example of ruling party’s myopic diplomacy.’ But foreign minister Gyawali ruled out any diplomatic friction between Nepal and the US due to the ongoing debate on the US programme and the growing demand from the party members to seek clarity from Washington.

No Extradition Treaty during Chinese President Xi visit

As the diplomatic community and political parties in Kathmandu show serious concern about the government’s ‘plan’ to sign the Nepal-China Extradition Treaty during the high level visit from China this week end, Nepal seems to back out from its plan.
“The understanding about China pressing Nepal to sign the Extradition Treaty has raised eyebrows in Kathmandu because it needs many rounds of transparent discussions before signing,” Nepali Congress (NC) leader and former foreign minister Dr Prakash Sharan Mahat said.
Remembering that Nepali Congress (NC) has had a cordial relations with China since the time of Nepal’s first elected Prime Minister BP Koirala – an ardent sociologist and the founder of Nepali Congress Party – Mahat said that Nepal always has adopted one-China policy but the Extradition Treaty needs to be discussed thoroughly before signing.
The diplomatic circle in Kathmandu, however, is worried that the treaty could be used by China to extradite Tibetans from Nepal. There are estimated 20,000 Tibetan refugees in Nepal – mostly in Kathmandu and Pokhara – at present. Some of them, who are suspected to be involved in Free Tibet movement, according to the Nepal Police, have already been arrested before the Chinese President’s visit. But the US and European Union (EU) take it as a gross violation against the human rights, and Nepal’s international commitment in the international agreements.
Taking part in a meeting in Baluwater, the official residence of the Prime Minister today, former prime minister and Nepali Congress (NC) president Sher Bahadur Deuba also suggested the government not to sign Extradition Treaty in haste as it needs wider consultations.
The meeting called by Prime Minister K P Sharma Oli also discussed on China-backed Belt and Road Initiative (BRI) and US-backed Indo-Pacific Strategy (IPS). The former prime ministers, and foreign experts present in the meeting reminded the government on Nepal's historic stance of non alignment. “Nepal should take advantage from both BRI and Indo-Pacific Strategy (IPS), and develop itself as a trading bridge between India and China,” suggested former premier Dr Baburam Bhattarai, on the occasion.
However, another former prime minister, who was in the meeting reminding what happened in Hong Kong after the proposals to allow extradition to mainland China, said that Nepal needs to follow the international commitments and agreements it has already signed before signing any bilateral agreements that could undermine the country's judicial independence and endanger rights of refugees especially Tibetan refugees. “The Extradition Treaty may ruffle many feathers,” he suggested.
Meanwhile, NC stalwart and former finance minister Dr Ram Sharan Mahat, wishing a historic success to President Xi visit to Nepal, said that Chinese assistance should focus on Nepal’s development, prioritise based on felt needs in power sector, road connectivity, technology transfer, investment and export trade, rather than wishful thinking without techno-economic appraisal.
However, foreign minister Pradeep Kumar Gyawali – during the meeting – briefed about the Nepal’s agenda. “Nepal has connectivity on top,” he briefed.
“The shopping list includes Kerung-Kathmandu Railway, physical infrastructure upgradation at the Kimathanka and Korala border, upgradation of Rashuwagadi customs and road to Kathmandu, Tatopani customs and road to Kathmandu, Tamor Hydropower and also the Madan Bhadari University,” another former prime minister, who took part in the meeting said, without wanting to be named. “Apart from the pacts, Beijing has sent a signal that there will be a big-surprise during Xi visit.”
According to a preliminary study, the 80-km long Kerung-Kathmandu cross border railway is estimated to cost Rs 300 billion, and will take 8 years to complete.
However, a Chinese team will visit Kathmandu tomorrow to finalise the drafts of agreements that are going to be signed in presence of Chinese President Xi’s visit, a high profile visit from northern neighbour after 23 year since Jiang Zemin visited in 1996.
Accepting the friendly invitation of President Mrs Bidya Devi Bhandar, the President of the People’s Republic of China Xi Jinping is paying a two-day state visit to Nepal on October 12 and 13.

RTGS comes to operation from Thursday

The central bank is launching real time gross settlement (RTGS) with an aim to settle high-value cheque payments in real-time from Thursday.
The Department of Payment System at Nepal Rastra Bank (NRB) confirmed the installation of the necessary software and mechanism to make the payment system more efficient.
Currently, the banking institutions take up to two days to clear and settle a cheque that is issued by one bank and deposited at another. But the RTGS once comes into operation will make clearance and settlement of high-value cheques within a few seconds. “The central bank has already inked the agreement with 28 commercial banks for the operation of RTGS,” the department informed, adding that it is also planning to ink the agreement with development banks and also other financial institutions by December.
Nepal Clearing House Ltd (NCHL) – a public company established jointly by central bank, and banks and financial institutions (BFIs) – is handling all works related to clearing and settlement of cheques, using electronic cheque clearing system, at present.
But after the RTGS is fully implemented, customers will even be able to make payments without issuing cheques, the department said, adding that the RTGS users will later on be able to fill up a form in their respective bank permitting transfer of funds to the targeted recipient without issuing cheque.
Until the system is fully implemented, the central bank is allowing payments through both cheques and RTGS but issuing a cheque or settlement form without sufficient balance in the account and intentionally signing off with a wrong signature will be blacklisted, according to the new directive.
While Connect IPS – operated by NCHL – has also been providing real-time settlement services, there are some difficulties in settlement of large amounts of money.
The central bank, has earlier announced that settlement of amounts between Rs 200,000 and Rs 2 million will have to be made through the RTGS or cheque system but the settlement of any amount above Rs 2 million will have to be mandatorily made through the RTGS.

Central bank to launch real time gross settlement system by mid-September

The central bank is launching the real time gross settlement system – to help ease settlement of online payment – in mid-September. “The central bank plans to launch the real time gross settlement system on September 15,” confirmed the central bank.
The real time gross settlement system is a fund transfer system in which money is moved from one bank to another in real time and on a transaction by transaction basis, which means there will be no waiting period. The real time gross settlement transactions can also be carried out between individuals via a legal framework. It is typically used for high-value transactions or urgent transactions that require and receive immediate clearing, according to the central bank.
“Once the system is activated, digital payment service providers will be incorporated in the system and they will be issued a separate licence to operate in the country,” according to the central bank. “Currentlym several digital payment service providers have been operating without being linked to the country’s payment system – which has led to revenue leakage and misappropriation of foreign currency – in the absence of a real time gross settlement system.
According to the central bank, real time gross settlement helps prevent risk by integrating digital payment settlement in its account before payment is passed to the collecting bank.
The central bank had – in April – banned accepting payment via AliPay and WeChat Pay – China’s most popular mobile payment platforms – as they have not been registered with the central bank. The central bank has termed the payments illegal as they were not incorporated in the country’s tax system, and Nepal was losing foreign income due to illegal use of these payment applications by Chinese tourists.
The central bank has after the incident is working – in collaboration with the Nepal Telecommunications Authority (NTA) – to introduce regulatory policies for digital financial service providers. The real time gross settlement system will help monitor all the payment systems, and payments of value added tax (VAT), income tax and excise duty can be made digitally.
Though, the payment system was under full control of banks and financial institutions (BFIs) until 2009, the operation of eSewa digital wallet in 2009, has changed the scenario of payment as customers can pay, send and receive money from their mobile phones and also over the internet even without a bank account. Apart from eSewa, there are many digital wallet products including Khalti, IME Pay, 4Enet Pay and I-Pay, currently.
Globally the central banks are facing the challenge to devise a mechanism to track payment settlement due to increasing number of digital payment service providers. Nepal Rastra Bank (NRB) – the central bank of Nepal – also was forced to bring Nepal Payment System Development Strategy with the aim of launching the real time gross settlement system.
Though, Nepal Clearing House was established as a public limited company in December 2008 to digitise cheque clearing services, it also looks after multiple payments, clearing and settlement systems. Apart from facilitating electronic cheque clearing services, it provides automated clearing house services in the form of the Interbank Payment System (IPS).
Fllowing the implementation of the real time gross settlement system, the clearing house will serve as an intermediary to enable banks to initiate and process transactions between the real time gross settlement system and its internal system, the central bank claimed, adding that the real time gross settlement system will help minimise systemic settlement risk in particular.