Nepal’s export of Ayurvedic medicines to Europe has declined following a ban on their import by European Union (EU) effective from May 1 citing public health risk.

 

Dr Rishiram Koirala, the President of Ayurvedic Doctors’ Association-Nepal (ADAN) said the ban has proved really bad as it came exactly when the export of Nepali Ayurvedic medicines was on the rise. He complained that the EU ban also affected export to other countries. Koirala claimed that the ban was imposed to promote internal production of EU,not due to any threat to health.

Toya Narayan Gyawali, the General Secretary (Check …. As there can be no such post as Gen Sec In a Ministry) at the Ministry of Commerce and Supplies said the government has not received any formal notice on the restriction. He said, “If the restriction has indeed been imposed, we will try to solve the problem as soon as we receive a formal notification.” Prior to the ban, there was growing demand of ayurvedic medicines in eight countries including Austria and Sweden. n

 

 

Rinchen Teaching Hospital in Dang

Construction is going on for Rinchen Teaching Hospital at Sisahania of Dang with an investment of Rs 8 billion. According to the executive committee of the hospital, the initial phase of work has been completed. Gopal Prasad Bhusal, the Chairman of the committee claimed the hospital would be one-of-its-kind among the non-profit hospitals in Nepal.

 

For the first phase, Rs 60 million was allocated while Bhusal said Rs 150 million may be required for designing and other works in the second phase. “In the third phase, the entire physical construction would be completed at an investment of Rs 6 billion,” said Bhusal. Another Rs 2 billion will be invested to make the hospital operational. Out of the total investment, Rs 200 million will be invested for information technology.

 

Between 60 to 80 percent of the total cost will be financed by Ranag Tulku Rinchen Rinpoche, the Protector of the hospital, informed executive committee member Tilak Bhandari. The rest of the cost is to be financed from the government, local bodies and local donors, he added.

 

According to Bhusal, the 700 bed-hospital plans to operate also air ambulance service in the future. The hospital will educate 100 MBBS, 50 MD, 200 BSC and 200 Nursing students every year. It will also conduct academic classes on meditation, yoga and spiritual knowledge. n

 

 

NRB’s Forced Merger By-laws

Nepal Rastra Bank (NRB) has issued a merger by-law that allows NRB to order a bank and financial institutions (BFIs) to merge if it is found weak in its vital indicators. The by-law also offers a number of incentives to encourage mergers, said Bhaskar Mani Gyawali, the NRB Spokesperson.

 

The BFIs opting for mergers will be waived off several conditionalitis related to upgradation and operational area expansion. The by-laws also relax the provision on mandatory ‘complete three year’ rule in adding number of branches in the districts allowed to operate.

 

The new regulation incorporates the provision of forceful merger, allowing the central bank to instruct two or more BFIs to merge if it deems appropriate. Similarly, the new rule has pledged relaxation on capital structure, shareholding limit for promoters, credit-deposit ratio, borrowing limit for promoters and deprived sector lending, among others.

 

The central bank can instruct or suggest BFIs to merge if representatives of the same group, firm or company are found holding positions in the board of directors of more than one BFIs. It can also do so if the BFIs’ non-performing loans exceed five per cent of the total loan portfolio for three consecutive years and if the BFIs’ independent operations are causing negative impact on the banking system. The NRB can also ask those BFIs to merge to which the central bank has taken three corrective actions in a row or even in a case where it thinks the merger would strengthen the overall banking system. n

 

Ncell Reduces 3G Tariff

Private sector telecom operator Ncell has come up with a new scheme with reduced tariff for high-speed 3G Internet. Under the scheme, the company offers 500 Mb data for Rs 399 (or 80 paisa per Mb) down from earlier Rs 499. Similarly, 1000 Mb is now priced at Rs 699 (or 70 paisa per Mb). The Internet users not subscribing to the new packages will have to pay Rs 2 per Mb. n

 

 

Banks’ Hydropower Investment Reach Rs 16 billion

The investment of Nepali Banks and Financial Institutions (BFIs) in hydro electricity projects has reached almost Rs 16 billion during the period of the last decade. Chilime Hydropower under the Public-Private Partnership model is the first project to have investment from Nepali banks. Himalayan Bank led the consortium of bankers to invest in this project. However, Indrawati is the first hydropower project promoted entirely by the private sector to receive bank investment.

 

Among the other projects with bank finance are Piluwa, Sunkoshi and Sanima Mai. While the former two are small projects, Sanima Mai is relatively big with 15.6 MW and it has investment from a consortium of 11 BFIs. Until now, the BFIs have invested in this sector only through consortium.

 

So far, a total of 21 banks and finance companies have invested in hydroelectricity projects. Clean Energy Development Bank and Jyoti Development Bank say they are specialised in investing in the energy sector and thus increase investment in this sector in the future. 

 

However, the investment of banks in hydroelectricity is a mere four per cent of the total deposits of the commercial banks. Recently, Nepal Rastra Bank changed the rule and allowed BFIs to invest up to 30 per cent of their loan outstanding in hydropower projects. Because the investment in this sector from the banks is very low compared to what they are allowed to, the private sector energy entrepreneurs have started arguing for fixing a minimum amount that the BFIs must invest in this sector.

 

Bankers say they are reluctant to invest in energy as it requires long gestation period and the returns are comparatively higher in other sectors. n

 

 

Registration of Hydropower Companies Made Easy

The Indistrial Promotion Board under the Ministry of Industry has changed the company registration rule for potential hydropower developer. According to the change, the the company registration for hydropower development is divided into two phases, says a souyrce at the Ministry of Industry.

 

With this there is no capital requirement specified for the company that wants to just conduct the feasibility study on the proposed project. But once the company completes the feasibility study and wants to develop the project, it must have its authorised capital at least Rs. 100 million per megawatt of the generation capacity of the proposed project.

 

The earlier provision required the company to have at least Rs. 100 million as authorised capital even while asking for the permission to conduct feasibility study. This had restrained many developers as they have to pay a high amount as the company registration fee. The Registrar of Companies charges higher registration fee for higher capital. n

 

 

Cash Rich Govt Institutions asked to Buy Shares in Listed Companies

The high-level financial sector reforms coordination committee has decided to issue directives to state-owned institutions to buy shares of companies listed in the stock echange. Dr Surbir Paudyal, a Member of the committee and Chairperson of the Securities Board of Nepal (SEBON) said, “A decision has been made to allow Employees Provident Fund and Citizens Investment Trust to invest in the shares of companies listed in the stock exchange.”

 

It has also been decided to review the policy on loan from the banks against the security of share certificates and to explore ways to reduce cost of investment in shares. The major costs of investment in shares includeinterest on loan against the security of share certificates, share brokers’ commission, capital gains tax and charges levied by Nepal Stock Exchange.

 

Under the existing policy, the banks are allowed to lend against the security of share cerrificates up to the amount of 60 per cent of the market value of the share and they have to make a margin call when the market price of the share so received as security falls more than 10 per cent.

 

The meeting also decided to immediately begin induction of new brokers, start operation of mutual fund and establish credit rating agency. n