SEARCH RESUMES FOR 17 PERSONS MISSING IN SWOLLEN TRISHULI RIVER Kathmandu, 17 July: Search resumed Tuesday for 17 persons missing in Trishul river when a bus lunge one day earlier killed 16 persons. The bus fell into the swollen river at Krishnabhir in neighbouring Dhading district. Accidents especially during the monsoon season are more regular with bad maintenance of roads and negligible monitoring nnnn MEDIA GOOGLE “The Mohan Baidya-led CPN-Maoist has announced that the party would soon start carrying out 'vigilante justice' against corrupt officials. “Bharat Dhanuk, CPN-Maoist Dadeldhura district in-charge, said on Monday that the party is starting the campaign across the country as part of its preparation for a 'people's revolt.' He also said that the party was regrouping former Maoist combatants and re-organising party structure. The mother party, UCPN (Maoist), had first introduced the vigilante justice system also known as 'Jana Karbahi' or the 'people's action' during the insurgency.” (The Kathmandu Post report from Dadeldhura, 17 July) MAOIST CHAIRMAN DAHAL’S PLAN FOR POWER CONSOLIDATION HITS ROADBLOCK Kathmandu, 17 July: UCPN (Maoist) Chairman Pushpa Kamal Dahal's plan to consolidate his power by ending factional politics in the party has hit a roadblock after three different political documents were presented in the party's recent central committee meeting. All the papers challenged Dahal's document, Kamal Dev Bhattarai writes in The Kathmandu Post.. Though his long-time rival Baburam Bhattarai has agreed to end factional politics, new leaders are now challenging Dahal's ideology and stronghold in the party. Politburo members Ram Karki, Sonam Sathi and Central Committee (CC) member Prabhu Shah has demanded the party allow forwarding their proposals at the plenum that has been rescheduled to begin from Tuesday. The CC meeting, however, did not take any decision on dealing with such political documents. In his document, Karki has said the lines taken by the UCPN (Maoist) and the CPN-Maoist have failed to clear the way for "revolution". He has said that the UCPN (Maoist) is stuck in the parliamentary system, while the CPN-Maoist's plan to return to war is not compatible with the ground-reality of the country. "There should be intensive discussions in the party about finding a "third thought" to accomplish a revolution in the country," Karki said in his document. Similarly, Sathi and his fellow comrades have demanded that there be freedom of expression inside the party until the party's General Convention. They have also demanded an end to the monopoly of any individual (read Dahal) and ensuring collective leadership. They have further demanded that the party leadership be elected from the periodic election of the party. "Our concerns should be addressed in the plenum, we have raised genuine issues," Sathi said. Supporting Sathi are leaders like Bhim Prasad Gautam, Ghana Shyam Sharma Poudel, Ishwori Bhattarai, Dharma Chandra Lawoti and Kisan Sharma. Madhesi leaders of the party, Prabhu Sah, Ram Kumar Sharma, Saran Yadav, Ramrijan Yadav and Bisonath Sah, also presented a separate document, which says that the party must address concerns of the Madhesi people. They have demanded that the party allocate some key positions to Madhesi leaders and accept 'one Madhes one province.' Though Dahal is holding discussions with leaders of the three groups, a deal is yet to be struck. Dahal has pledged to address the issues raised by the groups in the plenum. Nnnn ONE MONTH SOUGHT TO SETTLE TRANSLATION DISPUTE Kathmandu, 17 July: As the row over the translation and attestation of official documents continues with no end in sight, Deputy Prime Minister and Minister for Foreign Affairs Narayan Kaji Shrestha on Monday sought additional time from agitating parties to settle the issue, The Kathmandu Post writes. . On Monday, Shrestha held a meeting with General Secretary of Nepal Bar Association (NBA) Bijaya Mishra and Chairman of the Nepal Notary Public Association (NNPA) Basanta Bahadur Basnet to settle the ongoing dispute. At least 42 people seeking translation and attestation rallied at the Ministry of Foreign Affairs (MoFA) on Monday demanding services. People seeking translation services were left stranded after the state-owned Law Book Management House, or the Kanun Kitab Khana, stopped translating official documents last Wednesday in response to pressure from the NNPA, an umbrella organisation of private notaries. The NNPA had long been demanding that it be allowed to translate documents as dictated by the Nepal Notary Act-2006. However, citing inaccurate translations, the MoFA had been rejecting attestation to documents from notaries. DPM Shrestha said the quality of translations first be uplifted and only then will he take an initiative to become party to the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents. After Nepal becomes party to the convention, it can request member countries to abide by the terms of the treaty. Nnnn LOANS FOR CONSTRUCTION SECTOR GETS MORE EXPENSIVE Kathmandu, 17 July: Credit for the construction sector is likely to become more expensive as the Nepal Rastra Bank has directed all banks and financial institutions to manage additional 20 percent loan loss provision for credit extended on the back of collateral pledged by a third party, Rupak D Sharma writes in Republica.. Since half of the loans secured by the construction companies are backed by assets pawned by person or firms other than the borrower, the instruction generally means that extra cost to mitigate risk generated by such credit will be passed on to the borrower. "This could raise interest rate on such loans by around 0.5 percentage point," Surendra Man Pradhan, CEO of Sunrise Bank, told Republica. The construction sector, which develops physical infrastructure from roads and bridges to commercial complexes, has so far secured over Rs 60 billion in loans from commercial banks alone, of which Rs 8.5 billion was acquired in the first 10 months of fiscal year 2011/12. "Since the nature of business generally requires credit line to the tune of hundreds of millions of rupees, the new instruction on third-party collateral is expected to significantly raise debt servicing cost of construction firms," said Jaya Ram Lamichhane, the president of the Federation of Contractors´ Associations of Nepal. He, however, said the federation would come up with an official view after thoroughly reviewing the provision. The central bank has defined third party collateral as security provided by person or firms other than the lender (bank) and borrower. This means all loans secured by a person on the back of collateral pledged by spouse, children, or extended family members such as in laws, would require additional provisioning of 20 percent, according to Nepal Rastra Bank Spokesperson Bhaskar Mani Gyawali. This is also expected to affect corporate loans as firms that wish to secure credit backed by assets belonging to company´s promoters would be subjected to higher loan loss provisioning. The central bank has classified credit, or loans, into four categories: pass (good), substandard, doubtful and loss (bad). Loans are considered good when borrowers make installment payments regularly or when they stop paying the installment for a period of up to three months. Loans on which installment payments are not made for a period of between three to six months are classified as substandard loans, while loans, on which installment payments are not made for six months to up to a year are known as doubtful loans. Likewise, loans whose installment payments have not been made for more than a year are labeled bad loans. Based on this classification, banks and financial institutions have to allocate certain amount to ensure they do not land in trouble in case the borrower fails to return the money. For instance, in normal case, banks have to provision one percent of the due principal amount even if loans fall under ´good´ category. In case, these loans downgrade to ´substandard´ and ´doubtful´ categories, financial institutions have to allocate 25 percent and 50 percent of the outstanding principal amount for loan loss provisioning, respectively. In this manner, loans that fall under ´bad´ category require provisioning of 100 percent of the due principal amount. The central bank instruction on third-party collateral issued last Friday implies that loans extended under third-party collateral will now entail loan loss provisioning of at least 21 percent - including one percent normal rate and 20 percent additional rate - even if they fall in ´good´ category. Similarly, loan loss provisioning of 45 percent and 70 percent have to be made in case the loans turn to ´substandard´ and ´doubtful´, respectively. But since a central bank directive says loan loss provisioning need not exceed 100 percent of the principal amount, banks and financial institutions will not have to keep aside 120 percent of the principal amount in case the credit extended on collateral pledged by third party falls in ´bad´ category. However, most of the leading banks are not worried by the new provision as they are not exposed to such credit and discourage extension of such loans. "Such loans entails higher risk and create legal complications as well," said Sashin Joshi, CEO of NIC Bank, whose bank has exposure of 0.1 percent of the total credit portfolio to such loans. Similar comments were expressed by Ashoke Shumsher Rana, CEO of Himalayan Bank. Nepal Rastra Bank Spokesperson Gyawali, on the other hand, said the central bank had introduced the provision to protect the interest of depositors. "We are more concerned about depositors than billionaires who secure credit lines beyond their capacity," he said. Nnnn ________________________________________