Nepal Today

Monday, June 17, 2013

FORMER KING VISITING GAUR TUESDAY Kathmandu, 18 June: One day after prayer and worship at a gomba and two temples in Hetauda, formerKing Gyanendra offers puja at a temple in Gaur Tuessday. ‘I can’t do anything right now because the responsibility of the country right now I in the hands of political parties. I can only keep myself abreast with the country’s situation and the plight of the people,’ He told reporters in Hetuda, according to Naya Nepal. ‘I am on a visit of districts to keep myself abreast with the situation of the people and country.” Attempt has been made to politicize an entirely religious visit, he said. .nnnn 42 OPPOSITION PARTIES AGREE ON ALL-PARTY POLITICAL ASSEMBLY Kathmandu, 18 June: In an attempt to harmonise their demands, a group of 42 parties protesting against the government’s decision to hold the Constituent Assembly elections in November has agreed to an “all-party political assembly” as their common agenda, Roshan Shedai writes in The Kathmandu Post.. A joint meeting of the key forces on Monday assigned a taskforce to devise new protest programmes by Tuesday afternoon, which they said will be announced at the CPN-Maoist headquarters the same day. “Fresh protest programmes will be drawn up after adequate consultations with all the parties,” said Pampha Bhusal, the CPN-Maoist spokesperson. The boarder alliance has decided not to hold a dialogue with the government as well as the “big parties” unless the High-level Political Committee is replaced by a multi-party political assembly. Under pressure from alliance members, the CPN-Maoist shifted its earlier demand of a round-table conference to an all-party political assembly in an effort to bring uniformity in their demands. “Since the purpose of both the meets is the same, our party agreed to the name suggested by other members of the alliance,” said Bhusal. Despite launching a joint anti-election campaign, the 33-party alliance led by the CPN-Maoist, the Federal Socialist Party Nepal and the Upendra Yadav-led Federal Democratic Front were considered weak in the lack of unified agenda. The parties were divided over several issues including the legitimacy of the Khil Raj Regmi-led government. “The political syndicate exercised by the four parties is the main impediment to an agreement. We want it replaced by an all-party political assembly to break the current deadlock,” said Rajendra Shrestha, the FSPN general secretary. The meeting organised in the aftermath of the first round of protests decided to sit for talks only with the President, a source said. “Its must be clear who holds true power. If it’s the President, we will negotiate with him,” said Shrestha. Leaders who attended the meeting emphasised that everything except monsoon was in their favour in launching further programmes of protest. The parties have assessed the “silent support of the Civil Society and the rising dissatisfaction over the unilateral announcement of the election date among the middle-rung leaders of the major parties” as being supportive of their protest. Citing examples of how major changes such as secularism, federalism and proportional representation were achieved through protests, the alliance hopes agitation could lead them to achieve their demands. Nnnn INSIDER LENDING WIDELY PREVALENT IN FINANCIAL INSTITUTIONS- Kathmandu, 18 June:Officials of seven development banks faced the Nepal Rastra Bank’s (NRB) action for insider lending. These seven are among the 12 development banks that faced the central bank action in the last fiscal year for governance-related issues, Prithbi Man Shrestha writes in The Kathmandu Post. . Senior Officials of Narayani Development Bank, Kabeli Development Bank, Pathibhara Development Bank, Infrastructure Development Bank, Uddyam Development Bank, Excel Development Bank and Khadbari Development Bank were taken action after finding their involvement in insider lending, according to the NRB’s Development Bank Supervision Report. Also, a majority of the 11 finance companies that faced the NRB action last year were found involved in insider lending against the banking norms, according to the NRB. Some of the finance companies include Crystal Finance, Capital Merchant and Finance, Kuber Finance, General Finance, Baibhav Finance and Progressive Finance. The report also showed that 11 financial institutions that were declared crisis-ridden were the victims of insider lending. This reflects how insider lending is taking its toll on the banking sector . In the latest incident at Siddhartha Development Bank, insider lending led to the arrest of former Kist Bank Managing Director Kamal Gyawali’s wife Gauri Khanal, while Gyawali himself had to resign from his post. According to the Central Investigation Bureau (CIB) of Nepal Police, a loan worth Rs 130 million provided by Siddhartha to Jamko Publication was deposited in Khanal’s account in Prime Bank on the same day. Jamko’s proprietor Jishor Dhakal also took an additional Rs 120 million loan from Kist Bank, which Dhakal has claimed to have gone to Gyawali, according to NRB officials. The Bank and Financial Institution Act (BAFIA) has barred directors, chief executive officers and promoters having more than 1 percent stake in any bank or financial institution (FI) from taking loans from their own institution. However, the practice of taking such loans by creating fake loans in collusion with directors of other financial institutions and from the inter-bank deposits has been prevalent. In some cases, even the central bank is unknown about extent of the trouble in FIs and continues to put its deposits in them. The NRB had deposits in Nepal Share Market and Finance (NSMF) when it landed in trouble. The NSMF, which was in the process of upgrading itself into a commercial bank, increased its paid-up capital to Rs 2 billion from Rs 400 million within a short period. “Surprised by the sudden increment in the capital, we sent our team to find out how it was achieved. But they didn’t cooperate with our team,” said a senior NRB official. “Then, we demanded the details of loans, but we were provided with fake loan files created by using photocopies of citizenship certificates of depositors.” As much as 98 percent the capital added was created from deposits just to monopolise the rights shares by Yogendra Shrestha, immediate executive chairman of NSMF. Later, the company’s due diligence audit identified that Rs 1.72 billion was embezzled by creating 96 fake loanees. Similar was the case in Capital Merchant and Finance, which was also gearing up to increase its capital to become a commercial bank. NRB Spokesperson Bhaskar Mani Gyawali said it is natural that the central bank knows about insider lending in FIs only after incidents take place. He, however, said increased penetration of BFIs amid limited supervisory capacity of the central bank also aided insider lending. According to Gyawali, as BFI directors wanted to invest in the real estate sector when it was booming, a majority of them took loans from their own financial institutions by creating fake loanees or by other means. Bank directors and chief executives used different methods to get loans from their own financial institutions. For example, Laxmi Bahadur Shrestha, former director of Nepal Bangladesh Bank received loans from NCC Bank by creating a fake loanee in the name of Dipak Nar Singh Shrestha which remained unpaid for long, according to a banker in knowledge of the matter. “He also took many loans from Nepal Sri Lanka Merchant Bank (NSMB) indirectly by first putting NSMB’s deposits in other financial institutions and taking loans against those deposits,” said the NRB official. In a similar case at Siddhartha Development Bank, one of the former directors received Rs 100 million loans from Prudential Finance by putting Siddhartha’s deposit in the finance company, according to an NRB official. In order to control insider lending, the central bank has adopted a policy that requires CEOs and directors to submit their loan details to their banks and show the details to central bank supervisors. Earlier, it was provisioned that such loans should be disclosed in their audit reports. “We changed the policy later because disclosing personal information would not be practical as banks themselves vow not to make public about their client’s information,” said NRB’s Gnawali. nnnn MEDIA GOOGLE "I have no such critical health problem, I am completely fine. I am here for a medical check-up," (President Dr. Ram Baran Yadav after arrival in Tokyo, The Kathmandu Post, 19 June) nnnn


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