Government plans joint-venture bank to facilitate Nepal-China trade

The government is planning to set up a Nepali-China joint-venture (JV) bank to facilitate the trade between the two countries through banking facility.
Addressing the traders at an interaction – organised by Nepal Chamber of Commerce (NCC) here today – finance secretary Rajan Khanal said that the government is holding talks with the Chinese authorities to establish a JV financial institution to facilitate trade with the China through the banking system. “Establishment of a JV bank will make the Letter of Credit (LC) opening easy that will help formalise the trade,” he said, adding that a Chinese bank is likely to come to Nepal soon. “There is also a probability to create a JV with a government-owned bank.”
The private sector is also trying to bring a Chinese bank in Nepal to facilitate the trade with the northern neighbour since long. But they have not been successful in bringing any of them due to lack of suitable partner. “The traders are using Telex Transfer (TT) also known as wire transfer or draft to make the payment to the Chinese traders,” Khanal said, adding that the LC is an instruction from the importers to a bank in a foreign country to pay the money to the exporters when the required conditions are met while TT is the transfer of money from one bank account to another through electronic means.
The trade between Nepal and China is increasing in recent years. Nepal imported goods worth Rs 186.6 billion in the first 11 months of the current fiscal year 2018-19 from China, while it has exported goods worth Rs 1.96 billion to the northern neighbour.
Khanal, on the occasion, also said that the government is serious about addressing the grievances of the private sector. “The government is trying to create investment friendly environment with better incentives and tax waiver policies,” he said, asking the traders, however, to not run the businesses on tax incentives. “As Nepal is the members of the World Trade Organisation (WTO) and South Asia Free Trade Area (SAFTA), duties on import of foreign goods will go down gradually so you have to develop competitiveness.”
Likewise, revenue secretary Lal Shankar Ghimire, on the occasion, said that the government is planning to establish a Revenue Board in the first month in the next fiscal year.
The government has promised to establish a permanent Revenue Board since long. “It will come into existence from the beginning of the next fiscal year,” he said, adding that the government wants to have an intensive discussion with the private sector to make the board more effective, as the government wants to facilitate the business environment, “The Finance Ministry is developing a home delivery system for the Permanent Account Number (PAN) cards, which would be implemented soon.”
Ghimire also informed that the government is trying to protect the domestic products that have potential to make the country self-reliant. “The protection could sometimes be harmful for the consumers as the consumers have less choice, and the government also losses revenue but protection measures are being applied to let the domestic business grow and reduce the whopping trade deficit based on rising imports.”
President of the NCC Rajesh Kazi Shrestha, on the occasion, demanded the government not to promote industries that import raw materials. 

Central bank working on to retrieve money

The central bank said that it is making utmost efforts to retrieve money amounting to over Rs 400 million transferred to various banks abroad by hackers using SWIFT from NIC Asia Bank.
Some unidentified hackers broke into the Society for Worldwide Interbank Telecommunication (SWIFT) – an international payment network – at the NIC Asia Bank in Kathmandu, and had siphoned off the amount during the Tihar festival. A total of 11,000 banking and financial institutions across 200 countries are said to be using SWIFT system. The hackers have transferred the amount to eight banks in six countries, according to the investigation.
According to the deputy spokesperson at the central bank Rajendra Pandit, the central bank has asked the domestic banks to make efforts to retrieve the amount transferred abroad. It has also sought help of banks in those six countries from where hackers have requested the transfer.
Meanwhile, NIC Asia Bank has been stepping up its effort towards this end.
Pandit also reminded that the central bank had instructed all the banks and financial institutions to pay special attention to the usage of IT in banking not only to make banking easier, convenient but also to curb the cyber attack and illegal transferring in the banking.
The central bank had also summoned the chief of the IT department of all the banks in the capital to discuss how to secure the internal system of banking.
The central bank governor has also directed the banks and financial institutions to set up IT desk in their institutions.

Swift under cyber attack, Nepali banks feel the heat

Some Nepali banks have become latest victim to hackers siphoning off millions of dollars by targeting the backbone of the world financial system, SWIFT. Though, account-holders need not worry as their deposits parked in the bank are safe, the international wire transfer has come under suspicion as the incidents have been repeatedly occurring across the globe.
SWIFT – Society for Worldwide Interbank Telecommunication – is a global financial messaging system that thousands of banks and commercial organisations across the world use to transfer billions of dollars every day. SWIFT claims that over 90 per cent of fund transfers in the world take place through SWIFT.
Though, other banks have also been suspected under attack, unidentified cyber criminals have reportedly hacked into the SWIFT system of NIC Asia Bank and stole money, exposing vulnerability in the information technology system of the banks in the country, according to the central bank that has confirmed the reported cyber theft which took place during the Tihar vacation – October 19 to October 21 – when all the banks and the central monetary authority remained closed.
After the request of the bank, the central bank has today sent a team to take stock of the situation. NIC Asia has also already requested the central bank to initiate the cancellation of transfer of funds with the central banks of other countries, where the money already have been transferred. Meanwhile, it has not been clear, how, where and how much money have been transferred from Nepali banks.
"We, however, have not been able to confirm the exact amount of money that has been illegally transferred through multiple small transactions via SWIFT,” central bank's deputy spokesperson Rajendra Pandit said, adding that the central bank has also written to international banks and central banks of different countries not to entertain transactions generated from NIC Asia.
Apartfrom NIC Asia Bank, Prabhu Bank, NMB Bank and Prime Commercial bank's SWIFT codes have also been suspected to have been hacked by unknown hackers by using malware in their system.
However, the attack on NIC Asia closely resembles the 'biggest-ever cyber heist' that took place in Bangladesh. In May 2016, cyber criminals had hacked into the computer of a Bangladeshi central bank official to make illegal payments via SWIFT. The criminals had sent messages to the New York Federal Reserve seeking to transfer nearly $1 billion from Bangladesh Bank’s account. Though, most of the transfers were blocked, about $81 million was sent to a bank in the Philippines.
In 2016 a Turkish hacking group 'Bozkurtlar' or 'Grey Wolves' had hacked two Nepali banks – Business Universal Development Bank and Sanima Bank – and Bangladeshi banks, Dutch-Bangla Bank, The City Bank, and Trust Bank run by Army Welfare Trust.
A US-based cyber security website databreachtoday.com had reported on May 13, 2016 that the stolen data was ‘apparently posted online’ on May 10 by the group Bozkurtlar.
According to the report, the same hacking group had leaked data tied to Qatar National Bank and UAE's InvestBank also.
A report prepared by the Russia-based computer security firm Kaspersky Lab had said international cyber criminals had attempted to attack financial institutions in Nepal using a malware called Carbanak.
According to the experts, the hackers normally exploit vulnerabilities in the systems of member banks, allowing them to gain control of the banks’ legitimate SWIFT credentials.
The hackers then use those credentials to send SWIFT funds transfer request to other banks, which, trusting the messages to be legitimate, then sent the funds to accounts controlled by them.
Lately, numbers of developed nations have been struggling to address cyber attack as it has posed serious threat to the global financial market.