TThe Korean Company that owns Himalayas Spring Water situated in Rasuwa has decided to sell half of its shares for Rs 200 million to Muktishree Pvt Ltd, a Nepali company.“The Korean Company has now decided to have a separate Nepali company as its strategic partner,” informed Ganga Dhital, the General Manager of the company.

 

Though the decision has been made already, the formal transfer of shares is yet to materialise. The Department of Industry has also given its approval for the transfer of ownership. After the approval from the Office of the Company Registrar and Nepal Rastra Bank, the Korean company will get Rs 200 million from the buyers. n

 

 

New Model for Monetary Survey

Nepal Rastra Bank (NRB) is planning to carry out a monetary survey with a new and updated framework which is under preparation at present. An official at the NRB said the old framework is limited to a few commercial banks in its coverage as it was developed when the number of banks and financial institutions in the country was very small and the level of monetization in the economy was very low. With the growth in number of BFIs and much higher level of monetization of the economy, the old framework cannot correctly represent actual situation.

 

In the absence of clear demarcation of their functions in the law and rules, the commercial banks, development banks and finance companies carry out almost similar activities making it necessary to include them all in the scope of monetary survey to get the true picture of money supply in the economy. However, the existing system of monetary survey does not include the activities of development banks and finance companies. 

 

Deependra Bahadur Kshetry, Former Governor of NRB suggested including cooperatives as well in the survey as they too are doing similar activities as those of the banks. He also suggested that the monetary survey should include also the quantity of Indian currency in circulation in Nepal. n

 

 

49th IHRA Conference in Nepal

International Hotel and Restaurant Association (IHRA) has selected Nepal as the venue for its 49th Congress scheduled to be held from December 1 to 3. Dr Ghassan Aïdi, the President of IHRA officially informed Prime Minister Jhala Nath Khanal about the schedule recently.

 

The IH&RA has its head office in Geneva and has 1.1 million members around the globe representing 300,000 hotels and 800,000 restaurants, informed Aïdi.

 

IHRA had held its Congress in Nepal once before in 1968.

 

Nepal bagged the opportunity to organise the coming event winning over the bids of Argentina and Switzerland. n

 

 

Life Insurance Bonus to Go Down

The life-insurance policy holders should now be prepared for reduced bonus on their savings as the regulator of the sector, the Insurance Board (IB), has instructed the insurance companies to change their method o fcalculatin the returns from their investment for the bonus purpose.

 

 According to a recently issued directive from the Board, the actuaries of the insurance companies will now take maximum of 6 percent as the return from their investment. However, if the actual return in any of the last three year’s period covered by the acturial valuation is less than 6 percent, they are required to take that lower figure for the acturial valuation.

 

The insurance companies transfer such amount from their profit and loss account to the fund from where they can distribute bonus to the policyholders and dividend to the shareholders. Any surplus after such fund is provided for will be transferred to insurance fund which is to be treated as reserve from which neither bonus nor dividend canbe distributed.

 

This means the bonus rate on the savings of the life insurance policy holders will be less than 6 percent. At present some of the insurance companies are paying bonus at as high a rate as over 7 percent.

 

Shekhar Kumar Aryal, the Spokesperson of the Board said, “This provision has been made to ensure the longevity of the insurance company.”

 

Insurance company sources complain that this new rule will attract the people away from life insurance to depositing their savings in banks. n

 

 

Community-led Micro Hydros

The Society of Rural Empowerment based in Damauli has supported to install 112 micro hydro projects in eight districts that generated a total of one megawatt of electricity. Rs 53.2 million was invested in these projects. Sarita Gurung, President of the Society said the government’s Alternative Energy Promotion Centre and Danish International Development Agency’s (DANIDA) programme on alternative energy provided financial support to the projects.

 

As part of this programme, 47 projects were constructed in Dhading, 21 each in Gorkha and Makwanpur and 12 in Lamjung districts. Similarly, four each in Nawalparasi and Manang, three in Tanahu and one project in Rasuwa were constructed. According to the Society, 10,800 households benefitted from the programme. Projects were developed in areas not linked with national transmission line and having little chance of linkage anytime soon. n

 

 

Exporters Deprived Promised Incentive

The exporters are still denied the incentives they were promised by the government while presenting the budget for the current fiscal year. The reason behind this is the change in the government due to which there has been delay in getting approval from the council of ministers on the procedural guidelines prepared for this purpose.

 

According to Toya Narayan Gyawali, a Joint Secretary in the Ministry of Commerce and Supplies, the guidelines were presented to the Council of Ministers about four months ago. But the approval was delayed as the government changed in the meanwhile.

 

The government has made a provision in the current year’s Finance Bill to give the exportes a cash incentive of two to four per cent of the export value after the foreign currency payment is received against the export. The government has allocated Rs 250 million for this purpose.

 

Udaya Raj Pandey, the President of Garment Association Nepal (GAN) expressed frustration that the government failed to provide the promised incentive even though the time for a new budget is approaching so near. “The failure to implement the promise has irritated the exporters,” he said.

 

Pandey also said that since the government levies tax as soon as the budget is announced, it should show similar promptness also in implementing the promise of providing incentives. n

 

 

PE Management Board Proposal @ Cabinet

 

The Ministry of Finance has submitted a proposal to the Cabinet Secretarieat for the formation of the Public Enterprises Management Board as promised in the budget announcement of the current fiscal year. 

 

Lok Darshan Regmi, a Joint Secretary at the Ministry of Finance said the board will coordinate and facilitate the activities of the public enterprises.

 

However, the economists and management experts have termed this as a measure to avoid privatisation of public enterprises. In their view, this step would increase financial load on the PEs on the one hand and create one more bureaucratic hurdle in their operations.

 

Dr Bimal Koirala, the Former Chief Secretary of the government said, “It would be better to privatise the PEs than to form this board.”

 

The government has made a total loan investment of Rs 79.34 billion in these corporations so far. This year alone, Rs 16.19 billion was allocated in the budget for the 36 operational corporations. n