KATHMANDU, MAY 09 -
Nepal Rastra Bank (NRB) has decided to seize the passport of Yogendra Prasad Shrestha, former executive chairman of Nepal Share Market and Finance (NSM), and take action against him. A board meeting of the central bank on Sunday took the decision saying that Shrestha misappropriated more than Rs 2 billion.
As per the law, Shrestha may face a three to five years prison sentence. “It has been decided that action will be taken against Shrestha as per the law, and Nepal Rastra Bank Act, Bank and Financial Institutions Act and Banking Offence and Punishment Act are focussing on it,” said an NRB board member. “Initial probe shows huge irregularities in the company,” said a senior NRB official.
According to the central bank, investigation is still underway and the Nepal Rastra Bank Act, Bank and Financial Institutions Act and Banking Offence will be invoked in this case. These acts have provisions ranging from stopping dividend distribution to sending the institution into liquidation.
The central bank on Thursday had frozen Shrestha’s bank accounts and lockers for his refusal to produce documents sought by the NRB’s supervision team. The banking regulator has also frozen bank accounts of Gita Shrestha and Saurav Shrestha, relatives of Shrestha.
The NRB’s initial investigation found that Shrestha took loans from his own company in the name of fake loanees. Shrestha also misappropriated Rs 200 million of Rastriya Beema Sansthan (RBS). According to NRB officials, the deposit of RBS has not been included in the corporate deposit details that NSM has to send to the central bank.
The Nepal Share Market and Finance (NSM) episode has established what was feared in the domestic financial market. Bad corporate governance is spread in the banking fraternity and it is high time that the regulator took a hard decision.
A series of corporate governance mishaps have hit the domestic financial market hard, with NSM the latest casualty. The NSM episode shows how vulnerable corporate governance is in development banks and financial institutions. “The situation is much worse that what we had thought,” said a senior NRB official.
This fiscal year alone, the central bank has taken action against nine financial institutions (FIs) including five finance companies. In similar cases, the central bank penalised promoters, stopped FIs from collecting deposits, lending and distributing dividends.
In all cases, promoters were found to have manipulated banking norms related to insider lending. They also did not allow the management to work professionally. Those FIs having the same person as chairman and chief executive have suffered bad corporate governance the most, as seen in Samjhana Finance, United Development Bank, Gurkha Development Bank and Nepal Share Market.
The central bank was forced to dismiss DB Bamjan, then executive chairman of Gurkha, after a series of scandals plagued the bank. Several Gurkha promoters borrowed around Rs 500 million through third parties.
NRB investigation further showed that Gurkha, violating the Bank and Financial Institution Act (BAFIA), was in the process of buying land worth millions of rupees owned by its own promoter, Krishi Premura Holding. The bank had already paid Rs 300 million of Rs 900 million, the valued price of the land located at Kamaladi, Kathmandu.
Such was the level of irregularities that the central bank on April 29 had decided to write to the authorities concerned asking them to freeze all fixed and movable assets belonging to former directors, employees and loanees of the bank responsible for financial crisis in the institution, and take action against them under the Banking Offense Act. Officials facing the central bank’s action are former executive chairman Bamjan and directors Nirmal Gurung, Dhan Prasad Rai, Dinesh Shakya, Mina Shrestha, Sanjeev Kumar Mishra, Mahesh Prasad Rijal and Ramesh Tamang.
NRB investigation found that former executive chairman Bamjan took around Rs 250 million, while former general manager Shrestha and director Dhan Prasad Rai received Rs140 million and Rs 30 million, respectively, through third parties.
On Feb. 8, NRB decided to liquidate Banepa-based Samjhana Finance after the institution failed to recover from the financial crisis within stipulated time. Major promoters’ involvement in taking loans for themselves and their kin against banking norms led the finance company towards disaster. In Samjhana’s case, directors were not only involved in insider lending, they were also hiding details of certain transactions.
The risky behaviour of the promoters of Bara-based United Development Bank (UDB) led the central bank to declare it crisis-ridden. The promoters were found taking loans against banking norms and the BAFIA. UDB Chairman Rabindra Bahadur Singh and director Radha Krishna Amatya were each fined Rs 500,000.
The central bank in February banned three FIs—Mercantile Finance (Birgunj), Multipurpose Finance (Rajbiraj) and Investa Finance (Birgunj) from collecting deposits, lending and distributing dividends to shareholders for their failure to increase their paid-up capital on a proportional basis every year.
Posted on: 2011-05-09 08:58
http://www.ekantipur.com/2011/05/09/business/nrb-to-seize-former-nsm-chairmans-passport/333727.html
Montag, 9. Mai 2011
Freitag, 6. Mai 2011
NRB freezes NSM chairman’s bank accounts
KATHMANDU, MAY 06 -
The Nepal Rastra Bank (NRB) on Thursday froze bank accounts of Yogendra Prasad Shrestha, chairman of Nepal Share Markets and Finance, for not producing documents sought by a central bank supervision team.
The NRB has already written to banks and financial institutions (BFIs) to freeze bank accounts in the name of Shrestha. “We took this decision after Shrestha declined to produce documents asked by the inspection team,” said a senior NRB official. “We are still investigating.”
According to the central bank, it froze Shrestha’s bank accounts on the suspicion of irregularities while sanctioning some loans. Shrestha also confirmed that his accounts have been frozen and admitted that his company has failed to recover some loans.
“It is natural that vigilance on us has been upped, as we are preparing to become a commercial bank,” he said. However, a recent NRB directive bars ‘C’ class financial institutions to jump into ‘A’ class.
The central bank has also barred some finance companies, including Nepal Share Markets, from issuing dividends. Shrestha, however, claimed that the dompany does not have much problem.
Posted on: 2011-05-06 08:34
http://www.ekantipur.com/2011/05/06/business/nrb-freezes-nsm-chairmans-bank-accounts/333578.html
The Nepal Rastra Bank (NRB) on Thursday froze bank accounts of Yogendra Prasad Shrestha, chairman of Nepal Share Markets and Finance, for not producing documents sought by a central bank supervision team.
The NRB has already written to banks and financial institutions (BFIs) to freeze bank accounts in the name of Shrestha. “We took this decision after Shrestha declined to produce documents asked by the inspection team,” said a senior NRB official. “We are still investigating.”
According to the central bank, it froze Shrestha’s bank accounts on the suspicion of irregularities while sanctioning some loans. Shrestha also confirmed that his accounts have been frozen and admitted that his company has failed to recover some loans.
“It is natural that vigilance on us has been upped, as we are preparing to become a commercial bank,” he said. However, a recent NRB directive bars ‘C’ class financial institutions to jump into ‘A’ class.
The central bank has also barred some finance companies, including Nepal Share Markets, from issuing dividends. Shrestha, however, claimed that the dompany does not have much problem.
Posted on: 2011-05-06 08:34
http://www.ekantipur.com/2011/05/06/business/nrb-freezes-nsm-chairmans-bank-accounts/333578.html
Govt mulling incentives to encourage BFI mergers
KATHMANDU, MAY 06 -
Finance Minister Bharat Mohan Adhikari has said that the government was mulling introducing a number of incentives through the upcoming budget to encourage banks and financial institutions (BFIs) to merge.
“Mergers and acquisitions have become essential to address the needs of the prevailing market situation and to strengthen the nation’s economy,” said Adhikari while addressing an interaction programme entitled “Merger in Nepalese Context Prospects and Challenges”.
Participants in the programme that included senior government officials and bankers all agreed that mergers were the need of the hour with the country’s financial system going through a liquidity crisis and experiencing increased cost of funds and stiff competition. Amid speculation whether the central bank would go for a forceful merger, most of the participants argued in favour of a voluntary mergers.
However, Nepal Rastra Bank (NRB) governor Yubaraj Khatiwada said that the central bank could bring a provision for a forceful merger if the BFIs failed to act. “The central bank is not trying to enforce forceful mergers,” said Khatiwada. “As a regulator, we are just trying to encourage BFIs to merge; but if they neglect the need of the time, we will be forced to bring a mandatory provision to safeguard the economy.”
According to Khatiwada, the process of drafting guidelines for mergers and acquisitions is at the final stage and they will be unveiled soon.
Umesh Singh Bhandari, chief executive officer of Narayani National Finance, highlighted the problems and challenges of mergers. Two finance companies, Narayani Finance and National Finance, came together last year to become Narayani National Finance. “Management of human resources is a major challenge while going for a merger,” said Bhandari. “It takes time for the staff of two different entities to accept the common goals and objectives of a merged organisation.” The issue of share ownership structure, asset valuation and variance in the products and services were also raised during the programme.
Of late, an increasing number of BFIs have been readying themselves to merge. They have all been waiting for the central bank’s announcement of merger incentives. NRB is currently at the final stage of drafting merger guidelines. A relaxation in the single obligor limit, ownership pattern of the merged bank, deprived sector lending and branch expansion are some of the enticements that NRB is planning to offer BFIs going for a merger. Bankers said that instead of policy relaxation, there should be incentives like tax exemption which would make them serious about merging.
Till now, there have been only four instances of mergers between BFIs in Nepal. In the first half of 2000, the Khetan Group’s Laxmi Bank acquired Hisef Finance Company, and NB Bank took over NB Finance Company. However, both were mergers between companies of the same group. The merger between Narayani Finance and National Finance was the first one between financial institutions promoted by different groups. Recently, Nepal Sri Lanka Merchant Bank Limited was merged with NB Bank.
Birgunj Finance of Birgunj and Himchuli Finance of Pokhara also recently signed an agreement for a merger. It is not that only private BFIs are interested in merging. The government is also planning to merge two state-owned financial institutions, Rastriya Banijya Bank and Nepal Industrial Development Corporation.
Posted on: 2011-05-06 08:35
http://www.ekantipur.com/2011/05/06/business/govt-mulling-incentives-to-encourage-bfi-mergers/333580.html
Finance Minister Bharat Mohan Adhikari has said that the government was mulling introducing a number of incentives through the upcoming budget to encourage banks and financial institutions (BFIs) to merge.
“Mergers and acquisitions have become essential to address the needs of the prevailing market situation and to strengthen the nation’s economy,” said Adhikari while addressing an interaction programme entitled “Merger in Nepalese Context Prospects and Challenges”.
Participants in the programme that included senior government officials and bankers all agreed that mergers were the need of the hour with the country’s financial system going through a liquidity crisis and experiencing increased cost of funds and stiff competition. Amid speculation whether the central bank would go for a forceful merger, most of the participants argued in favour of a voluntary mergers.
However, Nepal Rastra Bank (NRB) governor Yubaraj Khatiwada said that the central bank could bring a provision for a forceful merger if the BFIs failed to act. “The central bank is not trying to enforce forceful mergers,” said Khatiwada. “As a regulator, we are just trying to encourage BFIs to merge; but if they neglect the need of the time, we will be forced to bring a mandatory provision to safeguard the economy.”
According to Khatiwada, the process of drafting guidelines for mergers and acquisitions is at the final stage and they will be unveiled soon.
Umesh Singh Bhandari, chief executive officer of Narayani National Finance, highlighted the problems and challenges of mergers. Two finance companies, Narayani Finance and National Finance, came together last year to become Narayani National Finance. “Management of human resources is a major challenge while going for a merger,” said Bhandari. “It takes time for the staff of two different entities to accept the common goals and objectives of a merged organisation.” The issue of share ownership structure, asset valuation and variance in the products and services were also raised during the programme.
Of late, an increasing number of BFIs have been readying themselves to merge. They have all been waiting for the central bank’s announcement of merger incentives. NRB is currently at the final stage of drafting merger guidelines. A relaxation in the single obligor limit, ownership pattern of the merged bank, deprived sector lending and branch expansion are some of the enticements that NRB is planning to offer BFIs going for a merger. Bankers said that instead of policy relaxation, there should be incentives like tax exemption which would make them serious about merging.
Till now, there have been only four instances of mergers between BFIs in Nepal. In the first half of 2000, the Khetan Group’s Laxmi Bank acquired Hisef Finance Company, and NB Bank took over NB Finance Company. However, both were mergers between companies of the same group. The merger between Narayani Finance and National Finance was the first one between financial institutions promoted by different groups. Recently, Nepal Sri Lanka Merchant Bank Limited was merged with NB Bank.
Birgunj Finance of Birgunj and Himchuli Finance of Pokhara also recently signed an agreement for a merger. It is not that only private BFIs are interested in merging. The government is also planning to merge two state-owned financial institutions, Rastriya Banijya Bank and Nepal Industrial Development Corporation.
Posted on: 2011-05-06 08:35
http://www.ekantipur.com/2011/05/06/business/govt-mulling-incentives-to-encourage-bfi-mergers/333580.html
Banks post higher Q3 profits
KATHMANDU, MAY 05 -
Commercial banks have posted higher third quarter profits compared to the same period last year despite a liquidity crunch that has slowed credit flow.
Five out of the 31 commercial banks in the country have published their Q3 financial reports showing good returns.
The Bank of Kathmandu made a net profit of Rs 451.28 million, NMB Bank Rs 252.5 million, Citizens Bank Rs 174.31 million, Global Bank Rs 157.74 million and Commerz and Trust Bank Rs 17.54 million.
According to the banks’ unaudited quarterly reports, they saw a healthy growth in profits ranging from 19 percent to 147 percent compared to the previous quarter. The figures are up 20 percent to 128 percent compared to Q3 in fiscal 2009-10. Similarly, the deposit base of the banks swelled in contrast to the previous quarter and the corresponding quarter in 2009-10. The Bank of Kathmandu was at the top of the list with a deposit base of Rs 19.25 billion and a lending portfolio Rs 17.55 billion.
Commerz and Trust Bank, which started operations on Sept. 20, 2010, registered a growth of 17.28 percent in its deposit base and 31.55 percent in its lending portfolio.
Meanwhile, NMB Bank said in a press statement that it would increase its paid-up capital to Rs 2 billion by the end of this fiscal year.
Net Profits of Commercial Banks as of the end of Q3
Bank of Kathmandu Rs 451.28million
NMB Bank Rs 252.50million
Citizens Bank Rs 174.31million
Global Bank Rs 157.74million
Commerz and Trust Bank Rs 17.54million
First dual-core processor smartphone resounds on Nepali soil
POST REPORT
Posted on: 2011-05-05 09:10
http://www.ekantipur.com/2011/05/05/business/banks-post-higher-q3-profits/333535.html
Commercial banks have posted higher third quarter profits compared to the same period last year despite a liquidity crunch that has slowed credit flow.
Five out of the 31 commercial banks in the country have published their Q3 financial reports showing good returns.
The Bank of Kathmandu made a net profit of Rs 451.28 million, NMB Bank Rs 252.5 million, Citizens Bank Rs 174.31 million, Global Bank Rs 157.74 million and Commerz and Trust Bank Rs 17.54 million.
According to the banks’ unaudited quarterly reports, they saw a healthy growth in profits ranging from 19 percent to 147 percent compared to the previous quarter. The figures are up 20 percent to 128 percent compared to Q3 in fiscal 2009-10. Similarly, the deposit base of the banks swelled in contrast to the previous quarter and the corresponding quarter in 2009-10. The Bank of Kathmandu was at the top of the list with a deposit base of Rs 19.25 billion and a lending portfolio Rs 17.55 billion.
Commerz and Trust Bank, which started operations on Sept. 20, 2010, registered a growth of 17.28 percent in its deposit base and 31.55 percent in its lending portfolio.
Meanwhile, NMB Bank said in a press statement that it would increase its paid-up capital to Rs 2 billion by the end of this fiscal year.
Net Profits of Commercial Banks as of the end of Q3
Bank of Kathmandu Rs 451.28million
NMB Bank Rs 252.50million
Citizens Bank Rs 174.31million
Global Bank Rs 157.74million
Commerz and Trust Bank Rs 17.54million
First dual-core processor smartphone resounds on Nepali soil
POST REPORT
Posted on: 2011-05-05 09:10
http://www.ekantipur.com/2011/05/05/business/banks-post-higher-q3-profits/333535.html
Gurkha Dev bank scam: NRB to freeze former officials’ assets
KATHMANDU, MAY 04 -
The Nepal Rastra Bank has decided to write to the authorities concerned asking them to freeze all fixed and movable assets belonging to former directors, employees and loanees of Gurkha Development bank, who are responsible for the financial crisis in the institution, and take action against them as per the Banking Offense Act.
The central bank’s board meeting held on April 29 decided to freeze their bank accounts, lockers, shares and other fixed assets.
Officials facing the central bank’s action are former executive chairman Dambar Bahadur Bamjan and directors Nirmal Gurung, Dhan Prasad Rai, Dinesh Shakya, Mina Shrestha, Sanjeev Kumar Mishra, Mahesh Prasad Rijal and Ramesh Tamang. Other officials include immediate general manager Rajendra Das Shrestha—who is also a promoter of the bank—immediate credit department chief Deepak Rana and former director Prabeen Naulakha who had resigned before the scandal came to light.
Nepal Mentha Product Limited Managing Director Rakesh Adukiya, who is also related to Gurkha’s promoter firm Krishi Premura Holding; loanees Sajeev Kumar Agrawal and Jeevan Ghimire; and Ruchi Jajodiya—wife of Adukiya—and Punam Khetan, directors of Krishi Premura, will also be facing the NRB’s action. The central bank has also decided dispatch a letter to authorities concerned, asking them to seize passports of former director Naulakha—who represented the bank’s board from Krishi Premura—loanees Ghimre and Agrawal and former general manager Shrestha. Passports of other former directors have already been seized. As per the Banking Offense Act, they may be slapped with three- to five-year jail term along with the payment of the amount equivalent to the offense and fines.
According to NRB, the main reason behind the bank’s current condition was bad corporate governance. On March 25, the central bank had declared the bank crisis-ridden. According to a Gurkha source, the directors have taken more than Rs 500 million although the Bank and Financial Institution Act (BAFIA) bars promoters and directors from taking loans from their own banks.
Former executive chairman Bamjan has taken around Rs 250 million, while former general manager Shrestha and director Rai have received Rs140 million and Rs 30 million, respectively, through third parties. Former director Dinesh Shakya, who had taken around Rs 100 million from the bank, has repaid almost all the amount, according the source. “Others have not paid a penny,” said the source.
A recent special general meeting of the bank has elected a new executive committee.
According the source, former executive chairman Banjan and immediate credit department chief, among others, were involved in diverting loans worth around Rs 130 million to one Suraj Dahal from the actual loanee Pancha Lal Maharjan.
Likewise, Adukiya had put up shares in various banks in the name of Nepal Mentha Product as collateral to enable loanees Agrawal and Ghimire to get loans for purchasing shares. “We think those loans were taken for Adukiya through Agrawal and Ghimire,” said a Gurkha official.
The bank’s immediate board had decided to purchase land belonging to Krishi Premura in Kamaladi, Kathmandu, although the BAFIA prohibits transactions among people having conflict of interest.
The bank sought to purchase the land for Rs 900 million although the actual market price stood at around one-third of the amount, according to NRB officials. The bank has already paid Rs 300 million for the land as advance. Immediate bank director Nirmal Gurung and Krishi Premura representative Naulakha have signed a deal in which Adukiya is witness. According to the Gurkha source, Adukiya also used to get involved in board decisions as an invited representative although people who are not in the board have no right to intervene in banks’ decisions.
vy PRITHVI MAN SHRESTHA, Posted on: 2011-05-04 08:40
http://www.ekantipur.com/2011/05/04/business/gurkha-dev-bank-scam-nrb-to-freeze-former-officials-assets/333484.html
The Nepal Rastra Bank has decided to write to the authorities concerned asking them to freeze all fixed and movable assets belonging to former directors, employees and loanees of Gurkha Development bank, who are responsible for the financial crisis in the institution, and take action against them as per the Banking Offense Act.
The central bank’s board meeting held on April 29 decided to freeze their bank accounts, lockers, shares and other fixed assets.
Officials facing the central bank’s action are former executive chairman Dambar Bahadur Bamjan and directors Nirmal Gurung, Dhan Prasad Rai, Dinesh Shakya, Mina Shrestha, Sanjeev Kumar Mishra, Mahesh Prasad Rijal and Ramesh Tamang. Other officials include immediate general manager Rajendra Das Shrestha—who is also a promoter of the bank—immediate credit department chief Deepak Rana and former director Prabeen Naulakha who had resigned before the scandal came to light.
Nepal Mentha Product Limited Managing Director Rakesh Adukiya, who is also related to Gurkha’s promoter firm Krishi Premura Holding; loanees Sajeev Kumar Agrawal and Jeevan Ghimire; and Ruchi Jajodiya—wife of Adukiya—and Punam Khetan, directors of Krishi Premura, will also be facing the NRB’s action. The central bank has also decided dispatch a letter to authorities concerned, asking them to seize passports of former director Naulakha—who represented the bank’s board from Krishi Premura—loanees Ghimre and Agrawal and former general manager Shrestha. Passports of other former directors have already been seized. As per the Banking Offense Act, they may be slapped with three- to five-year jail term along with the payment of the amount equivalent to the offense and fines.
According to NRB, the main reason behind the bank’s current condition was bad corporate governance. On March 25, the central bank had declared the bank crisis-ridden. According to a Gurkha source, the directors have taken more than Rs 500 million although the Bank and Financial Institution Act (BAFIA) bars promoters and directors from taking loans from their own banks.
Former executive chairman Bamjan has taken around Rs 250 million, while former general manager Shrestha and director Rai have received Rs140 million and Rs 30 million, respectively, through third parties. Former director Dinesh Shakya, who had taken around Rs 100 million from the bank, has repaid almost all the amount, according the source. “Others have not paid a penny,” said the source.
A recent special general meeting of the bank has elected a new executive committee.
According the source, former executive chairman Banjan and immediate credit department chief, among others, were involved in diverting loans worth around Rs 130 million to one Suraj Dahal from the actual loanee Pancha Lal Maharjan.
Likewise, Adukiya had put up shares in various banks in the name of Nepal Mentha Product as collateral to enable loanees Agrawal and Ghimire to get loans for purchasing shares. “We think those loans were taken for Adukiya through Agrawal and Ghimire,” said a Gurkha official.
The bank’s immediate board had decided to purchase land belonging to Krishi Premura in Kamaladi, Kathmandu, although the BAFIA prohibits transactions among people having conflict of interest.
The bank sought to purchase the land for Rs 900 million although the actual market price stood at around one-third of the amount, according to NRB officials. The bank has already paid Rs 300 million for the land as advance. Immediate bank director Nirmal Gurung and Krishi Premura representative Naulakha have signed a deal in which Adukiya is witness. According to the Gurkha source, Adukiya also used to get involved in board decisions as an invited representative although people who are not in the board have no right to intervene in banks’ decisions.
vy PRITHVI MAN SHRESTHA, Posted on: 2011-05-04 08:40
http://www.ekantipur.com/2011/05/04/business/gurkha-dev-bank-scam-nrb-to-freeze-former-officials-assets/333484.html
Dienstag, 3. Mai 2011
सीइओको सुविधा बढाउन असजिलो, युनियनको फाइनान्सको राष्ट्र बैंकमा आवेदन
नारायण सापकोटा, काठमाडौं, वैशाख २०- प्रमुख कार्यकारी अधिकृतको तलब सीमाले अन्य पदका कर्मचारीको सुविधा बढाउन असजिलो परेको जनाउँदै युनिक फाइनान्सले अप्ठेरो फुकाउन राष्ट्र बैंकमा आवेदन गरेको छ।
दोस्रो तहदेखिका कर्मचारीको तलब बढाउँदा कार्यकारी प्रमुखको भन्दा बढी हुने भएपछि बाधा फुकाउन युनिकका कार्यकारी प्रमुख राजमोहन कर्माचार्यले आवेदन गरेका हुन्।
‘राष्ट्र बैंकको निर्देशन बमोजिम तलव बढाउन नमिल्ने भएपछि युनिकका दोस्रो तहका कर्मचारीले पद छोडेका छन्,' वित्त कम्पनी संघका अध्यक्ष राजेन्द्रमान शाक्यले सोमबार नागरिकसँग भने, ‘यो समस्याको जानकारी कर्माचार्यले राष्ट्र बैंकमा समेत गराई सकेका छन्।'
युनिक स्थापनादेखि नै कर्माचार्य कार्यकारी प्रमुखको रुपमा प्रबन्ध सञ्चालक छन्। स्थापना हुँदा थोरै तलबमा काम गरेका उनले सर्वसाधारणलाई सेयर बिक्रीपछि बढाउन खोजेका थिए। त्यतिबेला नै राष्ट्र बैंकले प्रमुख कार्यकारी अधिकृतको तलव सिमा तोकेपछि कर्माचार्यलाई समस्या परेको हो। उनले यसमा केही बताउन चाहेनन्। कर्माचार्यको तलब ४० देखि ४५ हजार रुपैयाँ रहेको अनुमान गर्दै शाक्यले भने, ‘दोस्रो तहका कर्मचारी ६०-७० हजार तलब नदिई नआउने अवस्था छ।'
पश्चिमाञ्चल र पाटन फाइनान्सका कार्यकारी प्रमुखले पद छोडेपछि नयाँ नियुक्तिमा तलब नै बाधक बनेको शाक्यले बताए। ‘नयाँ व्यक्ति ल्याउन तलब सीमा नै वाधक बनेको छ,' उनले भने। वित्त कम्पनीमा भइरहेको कार्यकारी प्रमुखले पद छोडे धेरैमा यस्तो समस्या आउने अनुमान छ।
राष्ट्र बैंकले विकास बैंक र वित्त कम्पनीका लागि कार्यकारी प्रमुखको तलब सीमा अलग्गै मार्गनिर्देशनको गृहकार्य सुरु गर्दै त्यसअघि कम्पनीलाई परेको अप्ठेरो फुकुवा गरिदिनेे जनाएको छ। ‘निर्देशन जारी नहुन्जेलका लागि अप्ठेरो फुकाउने व्यवस्था राष्ट्र बैंकले मिलाएको छ,' राष्ट्र बैंकका प्रवत्ता भास्कर ज्ञवालीले भने।
संस्थापिच्छे अलगअलग रुपमा तलब तोक्ने बताउँदै आएको राष्ट्र बैंक विकास बैंक र वित्त कम्पनीका प्रमुख कार्यकारी अधिकृतकोका लागि अलग्गै मार्गनिर्देशन जारी गर्ने गृहकार्यमा छ। केही समयअघि जारी भएको तलव सम्वन्धी मार्गदर्शन विकास बैंक र वित्त कम्पनीका लागि कार्यान्वयनमा ल्याउन नसक्ने अवस्था देखिएपछि नयाँ निर्देशन जारी गर्न लागिएको हो।
राष्ट्र बैंकले केही समयअघि बैंक तथा वित्तीय संस्थाका प्रमुख कार्यकारीको तलव सीमा कुल सम्पतिको ०.०२५ प्रतिशत र कुल कर्मचारी खर्चको ५ प्रतिशतभन्दा वढी हुन नहुने गरी तोकेको थियो। तलव सुविधा तोके पनि खाईपाई आएको सुविधा नघट्ने व्यवस्था राष्ट्र बैंकले मिलाएको छ।
यो व्यवस्थाप्रति असहमति जनाउँदै विकास बैंक र वित्त कम्पनीले कार्यकारी प्रमुखको तलव अलग्गै तोक्नुपर्ने माग गरेका थिए। तलवको सिमा तोक्दा पर्ने प्रभावको जानकारी पनि बैंकरले राष्ट्र बैंकलाई गराएका थिए। वाणिज्य बैंकका कार्यकारी प्रमुख पनि तलव सिमाप्रति असन्तुष्ट छन्।
निर्देशन जारी हुने वित्तीकै एक साधारण सभा सम्पन्न नभएसम्म तलव बढाउन नपाउने व्यवस्थाले अप्ठेरो पारेका जनाउँदै केही वित्तीय संस्थाले अप्ठेरो परेको गुनासो राष्ट्र बैंकमा गरेका थिए। बताएका थिए।
वाणिज्य बैंकका प्रमुख कार्यकारीका लागि ल्याएको तलव सीमाले केही विकास बैंक र वित्त कम्पनीका प्रमुखका मासिक तलव १२ हजार रुपैयाँमा सिमित हुने अनुमान छ। एक जिल्ला कार्यक्षेत्र भएका विकास बैंकका कार्यकारी प्रमुखको मासिक तलव अहिले पनि करिव २५ हजार रुपैयाँ छ। राष्ट्रिय स्तरका विकास बैंकका प्रमुख कार्यकारीको तलव ६ लाख रुपैयाँसम्म छ।
प्रमुख कार्यकारी अधिकृतको तलव कम्पनीको सञ्चालक समितिले गरेको निर्णयमा तोकिनुपर्ने अडान बैंकरहरुको छ। अहिले बैंक तथा वित्तीय संस्थाको संख्या २ सय २१ पुगेको छ। यसमध्ये राष्ट्र बैंकको स्वीकृति लिएर वाणिज्य बैंक ३१, विकास बैंक ८८, वित्त कम्पनी ८९ र लघुवित्त संस्था २१ सञ्चालनमा छन्।
http://nagariknews.com/economy/industries/26076-2011-05-03-08-23-34.html
दोस्रो तहदेखिका कर्मचारीको तलब बढाउँदा कार्यकारी प्रमुखको भन्दा बढी हुने भएपछि बाधा फुकाउन युनिकका कार्यकारी प्रमुख राजमोहन कर्माचार्यले आवेदन गरेका हुन्।
‘राष्ट्र बैंकको निर्देशन बमोजिम तलव बढाउन नमिल्ने भएपछि युनिकका दोस्रो तहका कर्मचारीले पद छोडेका छन्,' वित्त कम्पनी संघका अध्यक्ष राजेन्द्रमान शाक्यले सोमबार नागरिकसँग भने, ‘यो समस्याको जानकारी कर्माचार्यले राष्ट्र बैंकमा समेत गराई सकेका छन्।'
युनिक स्थापनादेखि नै कर्माचार्य कार्यकारी प्रमुखको रुपमा प्रबन्ध सञ्चालक छन्। स्थापना हुँदा थोरै तलबमा काम गरेका उनले सर्वसाधारणलाई सेयर बिक्रीपछि बढाउन खोजेका थिए। त्यतिबेला नै राष्ट्र बैंकले प्रमुख कार्यकारी अधिकृतको तलव सिमा तोकेपछि कर्माचार्यलाई समस्या परेको हो। उनले यसमा केही बताउन चाहेनन्। कर्माचार्यको तलब ४० देखि ४५ हजार रुपैयाँ रहेको अनुमान गर्दै शाक्यले भने, ‘दोस्रो तहका कर्मचारी ६०-७० हजार तलब नदिई नआउने अवस्था छ।'
पश्चिमाञ्चल र पाटन फाइनान्सका कार्यकारी प्रमुखले पद छोडेपछि नयाँ नियुक्तिमा तलब नै बाधक बनेको शाक्यले बताए। ‘नयाँ व्यक्ति ल्याउन तलब सीमा नै वाधक बनेको छ,' उनले भने। वित्त कम्पनीमा भइरहेको कार्यकारी प्रमुखले पद छोडे धेरैमा यस्तो समस्या आउने अनुमान छ।
राष्ट्र बैंकले विकास बैंक र वित्त कम्पनीका लागि कार्यकारी प्रमुखको तलब सीमा अलग्गै मार्गनिर्देशनको गृहकार्य सुरु गर्दै त्यसअघि कम्पनीलाई परेको अप्ठेरो फुकुवा गरिदिनेे जनाएको छ। ‘निर्देशन जारी नहुन्जेलका लागि अप्ठेरो फुकाउने व्यवस्था राष्ट्र बैंकले मिलाएको छ,' राष्ट्र बैंकका प्रवत्ता भास्कर ज्ञवालीले भने।
संस्थापिच्छे अलगअलग रुपमा तलब तोक्ने बताउँदै आएको राष्ट्र बैंक विकास बैंक र वित्त कम्पनीका प्रमुख कार्यकारी अधिकृतकोका लागि अलग्गै मार्गनिर्देशन जारी गर्ने गृहकार्यमा छ। केही समयअघि जारी भएको तलव सम्वन्धी मार्गदर्शन विकास बैंक र वित्त कम्पनीका लागि कार्यान्वयनमा ल्याउन नसक्ने अवस्था देखिएपछि नयाँ निर्देशन जारी गर्न लागिएको हो।
राष्ट्र बैंकले केही समयअघि बैंक तथा वित्तीय संस्थाका प्रमुख कार्यकारीको तलव सीमा कुल सम्पतिको ०.०२५ प्रतिशत र कुल कर्मचारी खर्चको ५ प्रतिशतभन्दा वढी हुन नहुने गरी तोकेको थियो। तलव सुविधा तोके पनि खाईपाई आएको सुविधा नघट्ने व्यवस्था राष्ट्र बैंकले मिलाएको छ।
यो व्यवस्थाप्रति असहमति जनाउँदै विकास बैंक र वित्त कम्पनीले कार्यकारी प्रमुखको तलव अलग्गै तोक्नुपर्ने माग गरेका थिए। तलवको सिमा तोक्दा पर्ने प्रभावको जानकारी पनि बैंकरले राष्ट्र बैंकलाई गराएका थिए। वाणिज्य बैंकका कार्यकारी प्रमुख पनि तलव सिमाप्रति असन्तुष्ट छन्।
निर्देशन जारी हुने वित्तीकै एक साधारण सभा सम्पन्न नभएसम्म तलव बढाउन नपाउने व्यवस्थाले अप्ठेरो पारेका जनाउँदै केही वित्तीय संस्थाले अप्ठेरो परेको गुनासो राष्ट्र बैंकमा गरेका थिए। बताएका थिए।
वाणिज्य बैंकका प्रमुख कार्यकारीका लागि ल्याएको तलव सीमाले केही विकास बैंक र वित्त कम्पनीका प्रमुखका मासिक तलव १२ हजार रुपैयाँमा सिमित हुने अनुमान छ। एक जिल्ला कार्यक्षेत्र भएका विकास बैंकका कार्यकारी प्रमुखको मासिक तलव अहिले पनि करिव २५ हजार रुपैयाँ छ। राष्ट्रिय स्तरका विकास बैंकका प्रमुख कार्यकारीको तलव ६ लाख रुपैयाँसम्म छ।
प्रमुख कार्यकारी अधिकृतको तलव कम्पनीको सञ्चालक समितिले गरेको निर्णयमा तोकिनुपर्ने अडान बैंकरहरुको छ। अहिले बैंक तथा वित्तीय संस्थाको संख्या २ सय २१ पुगेको छ। यसमध्ये राष्ट्र बैंकको स्वीकृति लिएर वाणिज्य बैंक ३१, विकास बैंक ८८, वित्त कम्पनी ८९ र लघुवित्त संस्था २१ सञ्चालनमा छन्।
http://nagariknews.com/economy/industries/26076-2011-05-03-08-23-34.html
Montag, 2. Mai 2011
'Too big to fail'
KATHMANDU, MAY 02 -
When Continental Illinois, then one of the top 10 banks in the US, came under heavy pressure due to its exposure to the faltering energy sector in the summer of 1984, 24 other banks in the US came up with a rescue package, besides other measures from Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, to prevent Continental from going under. It’s hard to imagine Microsoft and other tech firms coming to the rescue of Google if it was about to go under. While competitors love to see their rivals go bankrupt in other businesses, banking, because of the complex web of relationship between participants in the financial system, is a different ball game where a problem in a single financial institution can bring down the whole banking system.
Banking, in other words, is a sector where a bank’s long-run survivability may not only depend on its own credit and investment portfolio but also that of other banks in the financial system. As bank runs on a few problematic banks can spread to other healthier ones due to lack of trust among the general public in the banking system and damage the whole financial system, it led to the conception of deposit insurance. Deposit insurance works by providing that “trust” as it guarantees the deposits, albeit to a limit, of deposit holders.
Why deposit insurance
Banks operate to a large extent by taking short-term demand deposits and channelling a majority of those deposits into loans of a longer duration. Banks only keep a small portion of the deposits in the form of cash reserves and liquid assets, and hence, at a given time, have the ability to meet withdrawals of only a fraction of their total deposits. However, the banking system is built upon the premise that only a fraction of the total deposits is withdrawn on a given day; and as long as banks are able to offset deposit withdrawals by either rolling over existing deposits and/or taking new deposits, banks will do fine.
The premise works well during normal times when the economy is doing well and when individual banks have a good credit and investment portfolio. During such a period, given the good financial position of banks, the general public’s faith in their ability to meet their demand for deposits is high. However, we all know that the economy moves in cycles; and in an economic downturn, the credit portfolio of banks can deteriorate quickly undermining their health and long-term sustainability. As is evident from the recent financial crisis, such deterioration in credit quality can lead to bank runs as depositors, fearing closure of their banks, rush to get their hard earned savings back. Even in good economic times, some banks, because of their strategy, can have a subpar credit and investment portfolio. As the quality of their asset worsens, the public’s trust in their ability to meet their demand for deposits also starts to waver. Hence, depositors rush to these banks to get their deposits out, but these troubled banks aren’t able to fulfil all the withdrawal requests. The inability of banks to pay out to their depositors creates further panic, and more depositors rush to withdraw their deposits, which ultimately leads to closure of these banks. If such episodes of deposit withdrawal were only to be limited to troubled banks, then it would have been fine as, economically, bad banks should pay the price.
However, as history has shown, such episodes are not only confined to troubled banks but also usually spread to healthier banks as the public’s trust in the whole banking system comes under pressure. When one or a few banks get into problems, the public perceives that other banks, irrespective of their financial status, will also follow suit, and hence jump to get their deposits out, which creates a vicious cycle and can undermine the whole banking system.
While the scope of deposit insurance to limit damage in the event of a systemic problem, such as a economic downturn, which affects the asset quality of the whole banking system is debatable, deposit insurance can, to some extent, help overcome the idea that one or a few bad banks can have a severe impact on the whole banking system. By assuring the public’s deposits, deposit insurance can limit potential problems in a troubled bank and prevent the problem in one bank from spreading to other banks.
The other side to deposit Insurance
Having said that, deposit insurance, however, does create perverse incentives for both depositors as well as banks. Without deposit insurance, depositors are expected to carry out due diligence before putting their savings in a bank. Depositors punish financially weak and risky banks by asking for a risk premium in the form of a higher interest rate. The riskier the bank, the higher will be the risk premium, so banks are compelled to be financially sound and stable. With deposit insurance, however, depositors will no longer have to monitor the performance and activities of their bank as they will be compensated in case it fails. As banks face less scrutiny from depositors, they are free to indulge in risk taking activities, the so-called moral hazard problem in economics. Banks are more than happy to pay a nominal premium for deposit insurance as they no longer have to pay a higher risk premium for taking high risks.
Moreover, if deposit insurance is to be voluntary, then it can lead to another problem of adverse selection whereby only riskier banks join the deposit insurance scheme and less risky ones opt to stay out, undermining the long-run sustainability of organisations running deposit insurance.
Deposit insurance in Nepal
In the middle of 2010, Deposit and Credit Guarantee Corporation (DCGC) introduced the Deposit Guarantee bylaw paving the way for the inception of deposit insurance in Nepal. DCGC charges 0.2 percent of the insured deposits as a premium for deposit insurance, and the premium can increase by 0.1 percent if banks fail to meet the risk metrics prescribed by it. Initially, the Deposit Guarantee bylaw made deposit insurance voluntary for banks and financial institutions. However, with Nepal Rastra Bank (NRB) making it mandatory for class B and C financial institutions, and hopefully soon for class A financial institutions, it can help overcome the problem of adverse selection that is inherent in voluntary insurance schemes.
Having said that, the problem of moral hazard will persist and the onus is on NRB and DCGC to ensure that, with deposit insurance, banks don’t indulge in riskier activities as depositors, with their deposits insured, no longer have the incentive to monitor their performance. Moreover, in the future, DCGC or the government should not set the precedent of guaranteeing uninsured deposits in the event of a problem in big financial institutions. If that were to be the case in the future, it will induce banks and financial institutions to become bigger in size—a notion called “too big to fail”—whereby the government will come to their rescue every time there is a problem.
(The writer is associated with a private bank. The views expressed are personal.)
Posted on: 2011-05-02 09:07
SANTOSH POKHREL, http://www.ekantipur.com/2011/05/02/business/too-big-to-fail/333390.html
When Continental Illinois, then one of the top 10 banks in the US, came under heavy pressure due to its exposure to the faltering energy sector in the summer of 1984, 24 other banks in the US came up with a rescue package, besides other measures from Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, to prevent Continental from going under. It’s hard to imagine Microsoft and other tech firms coming to the rescue of Google if it was about to go under. While competitors love to see their rivals go bankrupt in other businesses, banking, because of the complex web of relationship between participants in the financial system, is a different ball game where a problem in a single financial institution can bring down the whole banking system.
Banking, in other words, is a sector where a bank’s long-run survivability may not only depend on its own credit and investment portfolio but also that of other banks in the financial system. As bank runs on a few problematic banks can spread to other healthier ones due to lack of trust among the general public in the banking system and damage the whole financial system, it led to the conception of deposit insurance. Deposit insurance works by providing that “trust” as it guarantees the deposits, albeit to a limit, of deposit holders.
Why deposit insurance
Banks operate to a large extent by taking short-term demand deposits and channelling a majority of those deposits into loans of a longer duration. Banks only keep a small portion of the deposits in the form of cash reserves and liquid assets, and hence, at a given time, have the ability to meet withdrawals of only a fraction of their total deposits. However, the banking system is built upon the premise that only a fraction of the total deposits is withdrawn on a given day; and as long as banks are able to offset deposit withdrawals by either rolling over existing deposits and/or taking new deposits, banks will do fine.
The premise works well during normal times when the economy is doing well and when individual banks have a good credit and investment portfolio. During such a period, given the good financial position of banks, the general public’s faith in their ability to meet their demand for deposits is high. However, we all know that the economy moves in cycles; and in an economic downturn, the credit portfolio of banks can deteriorate quickly undermining their health and long-term sustainability. As is evident from the recent financial crisis, such deterioration in credit quality can lead to bank runs as depositors, fearing closure of their banks, rush to get their hard earned savings back. Even in good economic times, some banks, because of their strategy, can have a subpar credit and investment portfolio. As the quality of their asset worsens, the public’s trust in their ability to meet their demand for deposits also starts to waver. Hence, depositors rush to these banks to get their deposits out, but these troubled banks aren’t able to fulfil all the withdrawal requests. The inability of banks to pay out to their depositors creates further panic, and more depositors rush to withdraw their deposits, which ultimately leads to closure of these banks. If such episodes of deposit withdrawal were only to be limited to troubled banks, then it would have been fine as, economically, bad banks should pay the price.
However, as history has shown, such episodes are not only confined to troubled banks but also usually spread to healthier banks as the public’s trust in the whole banking system comes under pressure. When one or a few banks get into problems, the public perceives that other banks, irrespective of their financial status, will also follow suit, and hence jump to get their deposits out, which creates a vicious cycle and can undermine the whole banking system.
While the scope of deposit insurance to limit damage in the event of a systemic problem, such as a economic downturn, which affects the asset quality of the whole banking system is debatable, deposit insurance can, to some extent, help overcome the idea that one or a few bad banks can have a severe impact on the whole banking system. By assuring the public’s deposits, deposit insurance can limit potential problems in a troubled bank and prevent the problem in one bank from spreading to other banks.
The other side to deposit Insurance
Having said that, deposit insurance, however, does create perverse incentives for both depositors as well as banks. Without deposit insurance, depositors are expected to carry out due diligence before putting their savings in a bank. Depositors punish financially weak and risky banks by asking for a risk premium in the form of a higher interest rate. The riskier the bank, the higher will be the risk premium, so banks are compelled to be financially sound and stable. With deposit insurance, however, depositors will no longer have to monitor the performance and activities of their bank as they will be compensated in case it fails. As banks face less scrutiny from depositors, they are free to indulge in risk taking activities, the so-called moral hazard problem in economics. Banks are more than happy to pay a nominal premium for deposit insurance as they no longer have to pay a higher risk premium for taking high risks.
Moreover, if deposit insurance is to be voluntary, then it can lead to another problem of adverse selection whereby only riskier banks join the deposit insurance scheme and less risky ones opt to stay out, undermining the long-run sustainability of organisations running deposit insurance.
Deposit insurance in Nepal
In the middle of 2010, Deposit and Credit Guarantee Corporation (DCGC) introduced the Deposit Guarantee bylaw paving the way for the inception of deposit insurance in Nepal. DCGC charges 0.2 percent of the insured deposits as a premium for deposit insurance, and the premium can increase by 0.1 percent if banks fail to meet the risk metrics prescribed by it. Initially, the Deposit Guarantee bylaw made deposit insurance voluntary for banks and financial institutions. However, with Nepal Rastra Bank (NRB) making it mandatory for class B and C financial institutions, and hopefully soon for class A financial institutions, it can help overcome the problem of adverse selection that is inherent in voluntary insurance schemes.
Having said that, the problem of moral hazard will persist and the onus is on NRB and DCGC to ensure that, with deposit insurance, banks don’t indulge in riskier activities as depositors, with their deposits insured, no longer have the incentive to monitor their performance. Moreover, in the future, DCGC or the government should not set the precedent of guaranteeing uninsured deposits in the event of a problem in big financial institutions. If that were to be the case in the future, it will induce banks and financial institutions to become bigger in size—a notion called “too big to fail”—whereby the government will come to their rescue every time there is a problem.
(The writer is associated with a private bank. The views expressed are personal.)
Posted on: 2011-05-02 09:07
SANTOSH POKHREL, http://www.ekantipur.com/2011/05/02/business/too-big-to-fail/333390.html
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