From the Nepali Press
Ashish Gyawali in Annapurna Post, 25 February
With Nepal Rashtra Bank (NRB)’s governor Yubaraj Khatiwada‘s five-year tenure coming to an end next month, the government has announced its search for a new candidate. On Tuesday, the cabinet formed a three-member panel led by Finance Minister Ram Sharan Mahat to recommend two names for the post.
Many aspirants, from bank CEOs to former finance secretaries, have begun lobbying for their candidacy. A host of challenges awaits the new governor.
Immediately after assuming office, the new governor will have to decide whether to release controversial businessman Ajeya Raj Sumargi’s money which is currently withheld by NRB. After news that Sumargi’s company has not been registered with the Department of Industry came to light, the NRB withheld around Rs 3.5 billion, which was deposited in Sumargi’s bank accounts by unknown sources in the British Virginia Islands.
How the new governor deals with Sumargi’s case will be an early indicator of his character.
Another decision that the new governor needs to make is whether to allow Ncell from repatriating dividends to its foreign promoters which has so far been barred by NRB. How the new governor acts on this issue will partly determine the future of foreign investment in Nepal.
During Khatiwada’s tenure, nearly a dozen financial institutes were declared ‘problematic’. Khatiwada had also stopped issuing licenses to new banks and financial institutes. But, there are many development banks and financial companies still sailing through rough water. Will the new government introduce stringent policies to save problematic financial institutes?
CEOs of some private banks are already lobbying for issuance of new licenses. It will be a challenge for the new governor to withstand this pressure, apart from continuing with the NRB’s bank merger policy. Bankers will also exert pressure on the new governor to withdraw his predecessor’s decision to restrict chiefs of banks and financial institutes from serving more than a certain period
The NRB is now in the process of revising some key acts, including NRB Act-2002. But, bankers are opposed to some provisions in the revised acts. Whether the new governor will defend revisions of acts or give in to pressure by bankers will define Nepal’s future financial policies.
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1. Ajeya Raj Sumargi has a Belarus connection – what is it?
2. NCELL came to make money and take money – basic laws of FDI…
3. Each bank needs to go through stress tests.
Agree with namah above, why is NCELL not allowed to repatriate it’s dividends? They did not come as a charity/aid organisation to Nepal but as a foreign business investing in Nepal to make money. Nepal Rastra Bank’s delaying tactics are a very bad signal to the global business community. Without the global business community investing in Nepal very slim chance our economy will prosper.
Also the immunity that this Ajay Sumargi seems to enjoy is shocking. Should the concerned govt. authorities not obtain full clarification from him on who sent the money and for what purpose? This Ajay Sumargi seems to have no proper profitable business/source of income but is suddenly worth billions of rupees? Whose money is it? Maoist loot?
Yubraj Khatiwada’s five year tenure will be remembered only for his pettiness towards bank CEO remuneration. He achieved, just like his predecessors, nothing of any significance. Quite useless waste of opportunity for a poor country like Nepal. If not for remittance God forbid what would happen to our economy!
IF (big IF) remittance is going to be our staple diet (rather be the tool which staples our existence to the larger world) then lets do it right:
1. English medium schools in every VDC, DDC, etc.
2. Each girl and boy needs to choose a profession which is in demand abroad (i.e. doctor, engineer, IT, Network Security, Cloud Computing, Big Data, AIDS/HIV Research, Infectious diseases, Public Cert Accountant, Math/English/Physics teachers, Chef, etc.)
3. The GoN will waive all travel preparation fees (passport, special interviewing coaching, transport to embassy, Visa fees reimbursement, etc.)
4. The GoN will waive the No Objection Certificate requirement.
5. The GoN will try to process 10,000 (ten thousand) passports a day and try to send the same number of Nepalis abroad.
IN RETURN: GoN asks all NRNs (especially those who have benefited) from above policies to deposit 10,000 USD per year per person.
namah, we definitely should not base our economy on remittance!
It should be hydropower, tourism, trade, and commercial/commodities farming. Look we’ll never be an economic super power but if planned and implemented properly we don’t have to be so dirt poor too!
How come Binod Chaudry openly talk about their investments abroad (e.g. they own the Irish company that own more than 50% of NABIL Bank) when it’s at present illegal to do so by Nepali citizens. They apparently own a nice hotel property in the US and the wonderful Taj Samudra in Colombo, Sri Lanka. They actually state all this in their Chaudry Group proposal (with a certain vague disclaimers!).
Also a lot of rumours swirling around that they have over the years evaded VAT worth billions to the govt of Nepal. Billions that could have been used to build and maintain hospitals and schools.
All our patriotic and learned national leaders and national level bureaucrats keep silent about the illegal activities of the Binod Chaudry group. Yubraj Khatiwada and Lok Man Singh Karki should particularly hang their head in shame! You guys come from privileged families and have received quality advanced education (such a rarity in Nepal) and risen to high positions of responsibility…and if this is how you ignore those robbing the country in such a large scale…you guys are worse than the khaobadi Maobadis!
Personally I don’t know Mr. Rai, but Nepal should allow foreign deposit without a question as long as it is controlled legally by a company to enforce the foreign investors trust. As long as it’s coming who should care… If you can bring some currency inside you do it! Government should help and enforce such deposits and protect the DOERS.
I understand Nepal is a small country; and, a multibillionaire might buy it in one shot if foreign investment in allowed. Well government should set a cAp. i.e. 1 kharab/ person.
Oscar.