Citing the price hike in India, Nepal Oil Corporation (NOC) has, finally, hiked the prices of petroleum products. The state oil monopoly hiked petrol price by Rs 3 per litre, and Kerosene and diesel by Rs 2.50 per litre each. But it has not hiked the prices of cooking gas and aviation fuel.
The NOC has revised the prices of petroleum products upwards after it received the new price list from IOC on July 1. "Had the NOC not increased the price, it could have been incurring a loss of Rs 100 million per month, according to the new list," he added.
"With the price hike, price of petrol will be Rs 85 per litre and kerosene and diesel will cost Rs 65.50 per litre each," said Mukunda Dhungel, NOC spokesperson. "After the price hike, NOC will earn Rs 73.9 million in profit."
"The corporation was incurring a loss of Rs 1.16 billion in the current financial year," Dhungel said.
Earlier, the corporation had hiked petrol price to Rs 82 per litre and diesel — the poor man's fuel — and kerosene prices were hiked to Rs 62.50 per litre each. Then also, it had not changed the price of cooking gas. LPG costs Rs 1,250 per cylinder.
On every 1st and 15th of the English calendar month, NOC receives the new rate of diesel, kerosene and petrol from its supplier IOC. The rate of cooking gas is revised on the first of every English month according to the international market price.
According to the increased price in India since June 25, petrol and diesel were cheaper in Nepal by Rs 4.83 and Rs 2.10 per litre. "We had no option to hike to stop the back flow of the petroleum products due to open borders," Dhungel said.
For last one week, there has been a short supply of petroleum products. Though, Dhungel claims that the supply has been normalised, the supply crunch has still been experienced by the people. However, Consumer groups claim that the shortage has been created by NOC to raise the prices of petroleum products after the government turned down its loan request for Rs 1 billion.
But in the last cabinet meeting of the Madhav Kumar Nepal government, it was decided to give Rs 800 million to NOC so that it can pay its dues and supplies in the country could again become normal.
"The deep-rooted corruption in NOC created an artificial scarcity of petroleum products," said Jyoti Baniya, general secretary of the Consumers Rights Protection Forum(CRPF).
"The monopoly of NOC in petroleum products supply is repeatedly making the consumers suffer," a petroleum dealer said adding that the private sector should also be allowed to import petroleum products to create a fair market environment.
Tuesday, July 6, 2010
Monday, July 5, 2010
Nepal's per capita income looks to $568
Income of Nepali citizens has doubled in last one decade, though it might take more than a decade to graduate the country to even ‘very low income group’.
During the 2000-01, the per capita gross national income (GNI) of a Nepali was $259 only but it has doubled to $568 in 2009-10. “Nepal’s per capita gross national income (GNI) could touch $568,” according to the preliminary study of Central Bureau of Statics (CBS).
Currently, the per capita income of a Nepali is $472, the revised macro economic indicator reveals.
Per capita GNI is the dollar value of a country’s final income in a year, divided by its population. It reflects the average income of a country’s citizens.
In the last one decade, the GNI per capita has seen a continuous increase, except for one fiscal year — 2001-02 — when it dropped to $254 from $259 in 2000-01.
Knowing a country’s GNI per capita is a good first step toward understanding the country’s economic strengths and needs, as well as the general standard of living enjoyed by the average citizen.
As the general standard of living enjoyed by the average Nepali citizen has been deteriorating over the years, the growth in GNI per capita could be confusing to some extent.
A country’s GNI per capita tends to be closely linked with other indicators that measure the social, economic, and environmental well-being of the country and its people.
Normally people living in countries with higher GNI per capita tend to have longer life expectancies, higher literacy rates, better access to safe water, and lower infant mortality rates.
But Nepal comes at almost the bottom of the low income group.
According to the World Bank, a country with its GNI per capita above $20,000 comes under a very high income group. Similarly, $10,000 to $1,999 GNI per capita is categorised under high income group followed by a middle income group with $5,000 to $9,999 GNI per capita. A country with GNI per capita at $2,500 to 4,999 falls under the low income group, whereas a country less than $2,500 falls under the very low income group.
Meanwhile, the CBS report also reveals that the gross domestic production (GDP) at the basic price is expected to expand by 3.53 that was at 3.95 last fiscal year according to the revised projection. The government has — in its budget speech for 2009-10 — projected 5.5 per cent growth.
Similarly, the government also failed to curb the inflation that is hovering around 10 per cent, though the government has projected it to contain around seven per cent.
According to the CBS preliminary projection agriculture will grow by 1.05 per cent and non-agriculture sector will grow by 5.1 per cent.
In comparision to last fiscal year, the food crops production will see 5.88 per cent lesser this year.
“The major crops, paddy and maize will register a negative growth of 11.05 per cent and 3.91 per cent,” the preliminary report said. “Though agriculture contributes 33.03 per cent in the total gross domestic production (GDP), the preliminary report of CBS said.
During the 2000-01, the per capita gross national income (GNI) of a Nepali was $259 only but it has doubled to $568 in 2009-10. “Nepal’s per capita gross national income (GNI) could touch $568,” according to the preliminary study of Central Bureau of Statics (CBS).
Currently, the per capita income of a Nepali is $472, the revised macro economic indicator reveals.
Per capita GNI is the dollar value of a country’s final income in a year, divided by its population. It reflects the average income of a country’s citizens.
In the last one decade, the GNI per capita has seen a continuous increase, except for one fiscal year — 2001-02 — when it dropped to $254 from $259 in 2000-01.
Knowing a country’s GNI per capita is a good first step toward understanding the country’s economic strengths and needs, as well as the general standard of living enjoyed by the average citizen.
As the general standard of living enjoyed by the average Nepali citizen has been deteriorating over the years, the growth in GNI per capita could be confusing to some extent.
A country’s GNI per capita tends to be closely linked with other indicators that measure the social, economic, and environmental well-being of the country and its people.
Normally people living in countries with higher GNI per capita tend to have longer life expectancies, higher literacy rates, better access to safe water, and lower infant mortality rates.
But Nepal comes at almost the bottom of the low income group.
According to the World Bank, a country with its GNI per capita above $20,000 comes under a very high income group. Similarly, $10,000 to $1,999 GNI per capita is categorised under high income group followed by a middle income group with $5,000 to $9,999 GNI per capita. A country with GNI per capita at $2,500 to 4,999 falls under the low income group, whereas a country less than $2,500 falls under the very low income group.
Meanwhile, the CBS report also reveals that the gross domestic production (GDP) at the basic price is expected to expand by 3.53 that was at 3.95 last fiscal year according to the revised projection. The government has — in its budget speech for 2009-10 — projected 5.5 per cent growth.
Similarly, the government also failed to curb the inflation that is hovering around 10 per cent, though the government has projected it to contain around seven per cent.
According to the CBS preliminary projection agriculture will grow by 1.05 per cent and non-agriculture sector will grow by 5.1 per cent.
In comparision to last fiscal year, the food crops production will see 5.88 per cent lesser this year.
“The major crops, paddy and maize will register a negative growth of 11.05 per cent and 3.91 per cent,” the preliminary report said. “Though agriculture contributes 33.03 per cent in the total gross domestic production (GDP), the preliminary report of CBS said.
Saturday, July 3, 2010
Economic Survey paints bleak picture
Contrary to the projection of 5.5 per cent Gross Domestic Product (GDP) growth, the Economic Survey -- likely to be presented on July 8 -- puts forth a grim reality.
The Survey expects the GDP to expand by almost the half – by only 3.5 per cent – from the government’s projection due to low yield in the agriculture -- especially the major crops like maize and paddy -- and non-agriculture sector's low output than expected.
Similarly, the inflation also stands at 10.7 per cent against the projection of seven per cent, according to the Economic Survey.
The Survey also maintains that double digit price hike and slower growth have had an adverse effect on the consumers' purchasing power, posing a serious threat to the financial management.
Tradition has it that the Survey is presented a day ahead of the budget for the fiscal year but this year as the possibility of forming a new government seems still far, the caretaker government of Madhav Kumar Nepal is preparing to present the Finance Bill on July 9 a day after it is presenting the Economic Survey.
“We are planning to present Economic Survey on July 8,” said Keshav Acharya, senior economic advisor at the Finance Ministry.
Finance minister of the caretaker government Surendra Pandey is likely to present Financial Bill on July 9 that can give the government right to spend a quarter of this fiscal year’s expenditure. Though, delay in presenting budget will not hit the revenue collection as the Income Tax Act 2012 BS has given the government right to collect revenue not exceeding this fiscal year’s rates, it will definitely hit the development activities.
Since last three years, the successive governments have failed to spend on development activities as they failed to present the full-fledged budget on time due to political instability. In 2008, the then finance minister Dr Ram Sharan Mahat presented special budget only for four months and the next year in 2009, it took four months to pass the budget though the budget was presented on time. Such political instability has taken toll on the Nepal’s ranking in the economic freedom.
According to the 2010 Index published by Heritage Foundation and Wall Street Journal Nepal ranked 130th scoring 0.5 point lower than last year, reflecting declines in five of the 10 economic freedoms due to political instability.
It has hampered the development activities as the successive governments have not been able to spend properly on development activities. Due to balloning trade deficit and slowdown in growth rate of remittance -- that is hovering around 10 per cent -- the Balance of Payment (BoP) has also registered deficit. The whopping imports that is over six times the exports has also hurt the forex reserve that has been depleting.
The Survey expects the GDP to expand by almost the half – by only 3.5 per cent – from the government’s projection due to low yield in the agriculture -- especially the major crops like maize and paddy -- and non-agriculture sector's low output than expected.
Similarly, the inflation also stands at 10.7 per cent against the projection of seven per cent, according to the Economic Survey.
The Survey also maintains that double digit price hike and slower growth have had an adverse effect on the consumers' purchasing power, posing a serious threat to the financial management.
Tradition has it that the Survey is presented a day ahead of the budget for the fiscal year but this year as the possibility of forming a new government seems still far, the caretaker government of Madhav Kumar Nepal is preparing to present the Finance Bill on July 9 a day after it is presenting the Economic Survey.
“We are planning to present Economic Survey on July 8,” said Keshav Acharya, senior economic advisor at the Finance Ministry.
Finance minister of the caretaker government Surendra Pandey is likely to present Financial Bill on July 9 that can give the government right to spend a quarter of this fiscal year’s expenditure. Though, delay in presenting budget will not hit the revenue collection as the Income Tax Act 2012 BS has given the government right to collect revenue not exceeding this fiscal year’s rates, it will definitely hit the development activities.
Since last three years, the successive governments have failed to spend on development activities as they failed to present the full-fledged budget on time due to political instability. In 2008, the then finance minister Dr Ram Sharan Mahat presented special budget only for four months and the next year in 2009, it took four months to pass the budget though the budget was presented on time. Such political instability has taken toll on the Nepal’s ranking in the economic freedom.
According to the 2010 Index published by Heritage Foundation and Wall Street Journal Nepal ranked 130th scoring 0.5 point lower than last year, reflecting declines in five of the 10 economic freedoms due to political instability.
It has hampered the development activities as the successive governments have not been able to spend properly on development activities. Due to balloning trade deficit and slowdown in growth rate of remittance -- that is hovering around 10 per cent -- the Balance of Payment (BoP) has also registered deficit. The whopping imports that is over six times the exports has also hurt the forex reserve that has been depleting.
Tuesday, June 29, 2010
Fuel shortage to continue for a couple of days
The Valleyites will have to suffer more as the state-oil monoploy claims that the petroleum shortage will ease in a couple of days. The petrol pumps in the Valley started running dry since since last couple of days as Nepal Oil Corportation (NOC) failed to supply enough petroleum products.
"The shortage will ease from Thursday," said NOC spokesperson Mukunda Dhungel. "The dealers have loaded 48,000 litres of petrol, 36,000 litres of diesel and 2,400 litre of kerosene from Amlekhagunj depot today that is expected to reach the valley the day after."
The dealers have also loaded 2,15,000 litre of petrol and 3,57,000 litre of diesel from Thankot depot today.
However, most of the Valley petrol pumps today also wear a deserted look and some -- like Sajha, Nepal Police and Nepal Army petrol pumps -- had a serpentine queue throughout the day. "Today 68,000 litre of petrol, 1,80,000 litre of diesel and 83,000 litre kerosene reached the Thankot depot that is expected to ease the shortage," said the the state oil monopoly that has estimated the daily need of Kathmandu Valley at 3,00,00 litre of petrol and 4,00,000 litre to 4,50,000 litre of diesel in normal condition.
The NOC has failed to load the required amount of petroleum products from June 2, accepted Dhungel. "Our stock has also depleted by 9,000 kilo litre (KL) since June 2," he said adding that the stock on June 2 was 42,000KL and today it has dropped to 33,000KL now.
However, the pressure has increased since last four days as the NOC publically accepted that it cannot supply the required amount of the petroleum products. "We have asked for Rs 1 billion from the finance ministry to pay our supplier -- as we are in loss -- but the ministry turned down our request," the NOC said.
However consumer groups are not ready to believe that the NOC is in loss. "The international price has come down by half to around $70 per barrel from last year's $140 and NOC has been hiking the prices of petroleum products time and again," said Jyoti Baniya, general secretary of Consumers' Rights Protection Forum (CRPF). "Its yet another ploy to hike the price," he said adding that the monopoly market and deep-rooted corruption in the NOC is responsible for the accumulative losses. "The government must interfere," he suggested.
In March, NOC has hiked petrol, diesel and kerosene prices to Rs 80 per litre and Rs 61 per litre. On every 1st and 15th of the English calender month, NOC receives the new rate of petroleum products from its supplier Indian Oil Corporation (IOC).
The rate is revised according to the international market price. According to Dhungel, the new price list that is to be received on July 2 will have increased price of diesel. "The price in India has also gone up," he added.
"The shortage will ease from Thursday," said NOC spokesperson Mukunda Dhungel. "The dealers have loaded 48,000 litres of petrol, 36,000 litres of diesel and 2,400 litre of kerosene from Amlekhagunj depot today that is expected to reach the valley the day after."
The dealers have also loaded 2,15,000 litre of petrol and 3,57,000 litre of diesel from Thankot depot today.
However, most of the Valley petrol pumps today also wear a deserted look and some -- like Sajha, Nepal Police and Nepal Army petrol pumps -- had a serpentine queue throughout the day. "Today 68,000 litre of petrol, 1,80,000 litre of diesel and 83,000 litre kerosene reached the Thankot depot that is expected to ease the shortage," said the the state oil monopoly that has estimated the daily need of Kathmandu Valley at 3,00,00 litre of petrol and 4,00,000 litre to 4,50,000 litre of diesel in normal condition.
The NOC has failed to load the required amount of petroleum products from June 2, accepted Dhungel. "Our stock has also depleted by 9,000 kilo litre (KL) since June 2," he said adding that the stock on June 2 was 42,000KL and today it has dropped to 33,000KL now.
However, the pressure has increased since last four days as the NOC publically accepted that it cannot supply the required amount of the petroleum products. "We have asked for Rs 1 billion from the finance ministry to pay our supplier -- as we are in loss -- but the ministry turned down our request," the NOC said.
However consumer groups are not ready to believe that the NOC is in loss. "The international price has come down by half to around $70 per barrel from last year's $140 and NOC has been hiking the prices of petroleum products time and again," said Jyoti Baniya, general secretary of Consumers' Rights Protection Forum (CRPF). "Its yet another ploy to hike the price," he said adding that the monopoly market and deep-rooted corruption in the NOC is responsible for the accumulative losses. "The government must interfere," he suggested.
In March, NOC has hiked petrol, diesel and kerosene prices to Rs 80 per litre and Rs 61 per litre. On every 1st and 15th of the English calender month, NOC receives the new rate of petroleum products from its supplier Indian Oil Corporation (IOC).
The rate is revised according to the international market price. According to Dhungel, the new price list that is to be received on July 2 will have increased price of diesel. "The price in India has also gone up," he added.
Budget may not change income tax ceiling
The government is not going to increase income tax ceiling in the budget for the fiscal year 2010-11 as that will result in a higher gross disposable income further fuelling consumerism and ing the balance of trade.
"The government -- as suggested by entrepreneurs -- is rather encouraging exports," said finance secretary Rameshwor Khanal at a pre-budget interaction organised by the Confederation of Nepalese Industry (CNI) here in the Finance Ministry today.
According to CNI, the country is witnessing a ballooning trade deficit of Rs 238 billion. "If the domestic production could substitute the imports, the growing consumerism could also be beneficial. Increasing the income tax ceiling could harm the national economy by increasing the gross desposable income," he said.
Similarly, the government is also curbing investment abroad. "If the private sector is allowed to invest abroad, it could have an adverse impact on the economy as the country is facing liquidity crunch," he opined. Earlier, the government has relaxed the policy paving way for the the private sector to invest abroad. The government is now planning to persuade these investments back to the country.
CNI while making suggestions for the budget 2010-11 asked the government to introduce multi Value Added Tax (VAT). The finance ministry however made it clear that the government is sticking to the current VAT system for the moment.
"Investment-shy policies have hurt the economy," said CNI president and CA member Binod Chaudhary. "High interest rates, insecurity, electricity problem, labour unrest and lack of infrastructure development have increased business operating costs, creating difficulty in business development," he said. The budget should be effective in implementing the Industrial Policy 2067 that has recently passed, he demanded.
CNI has also insisted on removing demand charge in diesel as the alternative for electricity supply. "If need be, we have to look for an alternative like Infrastructure Development Bank for big infrastructure projects taken up jointly by the private sector and the government," said CNI vice-president Hari Sharma. "Large infrastructure projects that can become the base for economic development is the need of the hour," he added.
CNI has also urged the government for cooperation in making Nepal Tourism Year 2011 a success.
"The government for the success of NTY 2011 should make NTY 2011 period strike-free and grant financial assistance for the development of the tourism sector as a whole," Sharma said. Development of regional airports and renovation of ancient monuments as heritage hotels in participation with the private sector can boost the tourism sector, he said.
CNI has urged the government to make value addition in herbal products, refund duties and VAT to trading companies during re-export, remove export duty on Nepali exportable products, and to minimise fine of 25 per cent to 10 per cent in case exported goods returned among others. Technology transfer and ancillary industries should be encouraged for large, small and micro industries for their forward and backward linkages, CNI said.
The government has been advised to form Industrial Sickness Review Board (ISRB) and develop business corridor like Itahari-Biratnagar, Hetauda-Birgunj, and Butwal-Bhairahawa into Industrial Clusters.
Currently, food deficit has more than doubled to 3,12,000 tonnes from last year's deficit of 1,25,000 tonnes. Similarly, bank's lending to productive sector has also decreased to seven per cent from last year's 14 per cent. "The only sector that seems to achieve the target is revenue but the import-based revenue is also hurting competitiveness of the domestic production," the CNI said.
"The government -- as suggested by entrepreneurs -- is rather encouraging exports," said finance secretary Rameshwor Khanal at a pre-budget interaction organised by the Confederation of Nepalese Industry (CNI) here in the Finance Ministry today.
According to CNI, the country is witnessing a ballooning trade deficit of Rs 238 billion. "If the domestic production could substitute the imports, the growing consumerism could also be beneficial. Increasing the income tax ceiling could harm the national economy by increasing the gross desposable income," he said.
Similarly, the government is also curbing investment abroad. "If the private sector is allowed to invest abroad, it could have an adverse impact on the economy as the country is facing liquidity crunch," he opined. Earlier, the government has relaxed the policy paving way for the the private sector to invest abroad. The government is now planning to persuade these investments back to the country.
CNI while making suggestions for the budget 2010-11 asked the government to introduce multi Value Added Tax (VAT). The finance ministry however made it clear that the government is sticking to the current VAT system for the moment.
"Investment-shy policies have hurt the economy," said CNI president and CA member Binod Chaudhary. "High interest rates, insecurity, electricity problem, labour unrest and lack of infrastructure development have increased business operating costs, creating difficulty in business development," he said. The budget should be effective in implementing the Industrial Policy 2067 that has recently passed, he demanded.
CNI has also insisted on removing demand charge in diesel as the alternative for electricity supply. "If need be, we have to look for an alternative like Infrastructure Development Bank for big infrastructure projects taken up jointly by the private sector and the government," said CNI vice-president Hari Sharma. "Large infrastructure projects that can become the base for economic development is the need of the hour," he added.
CNI has also urged the government for cooperation in making Nepal Tourism Year 2011 a success.
"The government for the success of NTY 2011 should make NTY 2011 period strike-free and grant financial assistance for the development of the tourism sector as a whole," Sharma said. Development of regional airports and renovation of ancient monuments as heritage hotels in participation with the private sector can boost the tourism sector, he said.
CNI has urged the government to make value addition in herbal products, refund duties and VAT to trading companies during re-export, remove export duty on Nepali exportable products, and to minimise fine of 25 per cent to 10 per cent in case exported goods returned among others. Technology transfer and ancillary industries should be encouraged for large, small and micro industries for their forward and backward linkages, CNI said.
The government has been advised to form Industrial Sickness Review Board (ISRB) and develop business corridor like Itahari-Biratnagar, Hetauda-Birgunj, and Butwal-Bhairahawa into Industrial Clusters.
Currently, food deficit has more than doubled to 3,12,000 tonnes from last year's deficit of 1,25,000 tonnes. Similarly, bank's lending to productive sector has also decreased to seven per cent from last year's 14 per cent. "The only sector that seems to achieve the target is revenue but the import-based revenue is also hurting competitiveness of the domestic production," the CNI said.
Monday, June 28, 2010
Petroleum scarcity hits Valley
The petrol pumps in the Valley are once again running dry. The irritant is not hard to seek. It is the ubiquitous constraints in supply as the sole petroleum products supplier Nepal Oil Corporation (NOC) has been unable to supply enough due to diminishing stock.
The state-run sole petroleum supplier has said that its sole supplier Indian Oil Corporation (IOC) has reduced the sdupply as NOC could not pay its due.
However, some of the petroleum dealers are claiming that its NOC's old trick to hike the prices of petroleum products.
"The international price has come down by half to $70 per barrel currently from last year's $140 and NOC has hiked the prices of petroleum products twice in 2010, once in February and again in March," he said adding that the deep-rooted corruption in the state-oil monopoly is responsible for the accumulative losses.
In March, it has hiked petrol, diesel and kerosene prices. Petrol was hiked to Rs 80 per litre -- dearer by Rs 2.50 -- and diesel and kerosene prices were hiked to Rs 61 per litre -- Rs 2 dearer -- in Kathmandu Valley. It has not changed the price of cooking gas, that according to the corporation, is making loss. LPG -- popularly known as cooking gas -- costs Rs 1,250 per cylinder.
On every 1st and 15th of the English calender month, NOC receives the new rate of diesel, kerosene and petrol from its supplier IOC. However, the rate of cooking gas is revised -- according to the international market price -- on the first of every English month.
NOC said, its sole supplier IOC cut the supply from this time stating that it could not pay the dues.
The NOC has asked Rs 1 billion with the finance ministry that rejected the idea saying the government cannot give money. "The NOC asked us to either let it hike price or lend Rs 1 billion," the source at the ministry said adding that the ministry rejected both the option.
The state-run sole petroleum supplier has said that its sole supplier Indian Oil Corporation (IOC) has reduced the sdupply as NOC could not pay its due.
However, some of the petroleum dealers are claiming that its NOC's old trick to hike the prices of petroleum products.
"The international price has come down by half to $70 per barrel currently from last year's $140 and NOC has hiked the prices of petroleum products twice in 2010, once in February and again in March," he said adding that the deep-rooted corruption in the state-oil monopoly is responsible for the accumulative losses.
In March, it has hiked petrol, diesel and kerosene prices. Petrol was hiked to Rs 80 per litre -- dearer by Rs 2.50 -- and diesel and kerosene prices were hiked to Rs 61 per litre -- Rs 2 dearer -- in Kathmandu Valley. It has not changed the price of cooking gas, that according to the corporation, is making loss. LPG -- popularly known as cooking gas -- costs Rs 1,250 per cylinder.
On every 1st and 15th of the English calender month, NOC receives the new rate of diesel, kerosene and petrol from its supplier IOC. However, the rate of cooking gas is revised -- according to the international market price -- on the first of every English month.
NOC said, its sole supplier IOC cut the supply from this time stating that it could not pay the dues.
The NOC has asked Rs 1 billion with the finance ministry that rejected the idea saying the government cannot give money. "The NOC asked us to either let it hike price or lend Rs 1 billion," the source at the ministry said adding that the ministry rejected both the option.
Sunday, June 27, 2010
Commercial banks deposits increases
Propelled by the pre-year end government spending, the deposit of the commercial banks have seen a 'satisfactory' increment compared with a couple of months ago.
"Only two weeks ago, around Rs 7 billion deposit has increased," said Sashin Joshi, president of Nepal Bankers Association (NBA).
According to the highly placed source at the central bank the deposit of commercial banks has increased to Rs 592 billion by the end of May. "It might increase to Rs 600 billion by the end of the fiscal year," the source added.
However, Joshi thinks that the growth rate is still lower compared with last fiscal year's growth rate. "However, it is a good sign as in the last six months, there was almost zero per cent increase in the deposit growth," he said adding that the bankers are watching keenly the sustainability of the growth rate.
Accelerated by the increasing growth rate of the deposit, the deposit mobilisation of the commercial banks has also increased.
According to the central bank's data based on 10 months macroeconomic situation, deposits mobilisation of commercial banks increased by 5.6 per cent (Rs 30.6 billion) amounting to Rs 580.5 billion as at mid-May 2010. In the nine months, deposits mobilisation of commercial banks stood at Rs 576.3 billion.
Similarly, the liquid assests of the commercial banks also stood at Rs 170.4 billion as at mid-May. It was at Rs 164.9 billion in the six months. Liquid assets include the cash at the bank's vault, their reserves at the central bank and the marketable securities.
"The positive data will certainly boost the confidence of the depositors, who are still under the hangover of the last Dashain's bitter experience," the central bank source said adding that they are hesitant on depositing money at the banks due to low confidence, though banks are offering depositors higher interest rates than last year.
The depositors have lost confidence due to series of issues starting from last Dashain's cash crunch to souce declaration while depositing above Rs 1 million.
Meanwhile, the commercial banks average credit-to-deposit (CD) ratio has also dropped to 86 per cent from around 95 per cent some months ago. According to the central bank commercial banks CD ratios should not exceed 95 per cent by the end of this fiscal year, 85 per cent by the end of 2010-11, and 80 per cent by the end of 2011-12.
Similarly, to make the banking sector more stronger, the NRB has also drafted risk management guidelines that will be issued to commercial banks by July end. "Though, new prudential measures will be challenging for the commercial banks to meet, it will strenghten the sector and help mitigate the market risks," the central bank source said.
"Only two weeks ago, around Rs 7 billion deposit has increased," said Sashin Joshi, president of Nepal Bankers Association (NBA).
According to the highly placed source at the central bank the deposit of commercial banks has increased to Rs 592 billion by the end of May. "It might increase to Rs 600 billion by the end of the fiscal year," the source added.
However, Joshi thinks that the growth rate is still lower compared with last fiscal year's growth rate. "However, it is a good sign as in the last six months, there was almost zero per cent increase in the deposit growth," he said adding that the bankers are watching keenly the sustainability of the growth rate.
Accelerated by the increasing growth rate of the deposit, the deposit mobilisation of the commercial banks has also increased.
According to the central bank's data based on 10 months macroeconomic situation, deposits mobilisation of commercial banks increased by 5.6 per cent (Rs 30.6 billion) amounting to Rs 580.5 billion as at mid-May 2010. In the nine months, deposits mobilisation of commercial banks stood at Rs 576.3 billion.
Similarly, the liquid assests of the commercial banks also stood at Rs 170.4 billion as at mid-May. It was at Rs 164.9 billion in the six months. Liquid assets include the cash at the bank's vault, their reserves at the central bank and the marketable securities.
"The positive data will certainly boost the confidence of the depositors, who are still under the hangover of the last Dashain's bitter experience," the central bank source said adding that they are hesitant on depositing money at the banks due to low confidence, though banks are offering depositors higher interest rates than last year.
The depositors have lost confidence due to series of issues starting from last Dashain's cash crunch to souce declaration while depositing above Rs 1 million.
Meanwhile, the commercial banks average credit-to-deposit (CD) ratio has also dropped to 86 per cent from around 95 per cent some months ago. According to the central bank commercial banks CD ratios should not exceed 95 per cent by the end of this fiscal year, 85 per cent by the end of 2010-11, and 80 per cent by the end of 2011-12.
Similarly, to make the banking sector more stronger, the NRB has also drafted risk management guidelines that will be issued to commercial banks by July end. "Though, new prudential measures will be challenging for the commercial banks to meet, it will strenghten the sector and help mitigate the market risks," the central bank source said.
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