News Digest – Economy and Development (September 2 – 8, 2021)

0 Comments

Finance and Banking-

Nepal Rastra Bank (NRB) on 07 September issued a notice allowing borrowers and entrepreneurs to take conditional loans for industry or businesses against shares of more than NPR 120 million. The new provision has also allowed banks and financial institutions (BFIs) to pledge shares as assets for loans and other commercial activities.

Nepal Merchant Bank and Finance Limited (NMB) has won the ‘Green Deal of the Year’ award from Asian Banking and Finance magazine under the Corporate and Investment Banking Awards category for 2021. NMB has been recognized as the trailblazer of Green Financing in Nepal for its pioneering debt deal with International Finance Corporation (IFC) under which the bank provides credit facilities to projects that qualify as Green Deals under the IFC eligibility criteria.

The central bank (NRB) has introduced the ‘Payment System Inspection and Supervision Bylaw 2021’ to formalize inspection and supervision of payment system operators and payment service providers. The bylaw is anticipated to increase transparency of payment system operators and providers with NRB monitoring the activities of banks and financial institutions (BFIs). Similarly, a payment system recommendation committee has also been formed (under the leadership of the deputy governor) to amend and issue policy-level provisions for the development, expansion and security of the payment system.

Trade and Money-

The Debt Recovery Tribunal, which is responsible for the recovery of debts of banks and financial institutions (BFIs) has managed to recover only NPR 2.08 billion and NPR 1.99 billion in the last two fiscal years (FY) 2019/20 and (FY) 2020/21 as compared to a recovery of NPR 5.7 billion in (FY) 2018/19. Delay in issue of verdicts and their implementation (where officials were not able to conduct field visits for evaluation of the collateral property) has been cited as primary reasons for the tribunal’s failure in debt recovery.

According to a report published by the Insurance Committee, non-life insurance companies have collected NPR 3 billion in insurance premiums within the first month of the current fiscal year (FY) 2021/22. Non-life insurance companies were able to achieve this feat by issuing insurance policies worth 241,837 between mid-July 2021 to mid-August 2021; an increment of 10.74 percent as compared to the same period last year.

According to NRB’s new report, Nepal bought Indian rupees (INR) worth NPR 535.23 billion by selling US dollars to finance its import bill in the last fiscal year (FY) 2020/21. With this, the country’s spending of US dollar on its import has increased by 19 percent.

Tourism-

Nepal Tourism Board (NTB) and the Trekking Association of Nepal (TAAN) have signed a memorandum of understanding (MoU) to collaborate on a project titled ‘Sustainable Tourism for Livelihood Recovery’ to create jobs for people from the tourism industry. Funded by NTB and United Nations Development Programme (UNDP), the project is aimed at creating 50,000 short-term jobs and 2000 local jobs with works ranging between 70,000 man-days to 100,000 man-days.

According to Department of Immigration (DoI), a total of 6,000 tourists visited Nepal in the month of August, wherein 2,192 where from SAARC nations, 1,105 from Europe, 1,244 from USA, 416 from England and 253 from China. Similarly, Department of Tourism (DoT) has granted permission to 160 climbers of 16 expedition teams to climb Mount Manaslu. With this, a total of 3.146 million has been collected as royalty from climbing permits.

Hotel and Tourism Entrepreneurs Association of Sunsari has decided to launch a package tourism guidebook for Province 1. Privately funded, the book is anticipated to help travelers with concrete information, knowledge and overall routes of major tourist destinations and activities within the province.

Share Market-

The Nepal Stock Exchange Ltd (NEPSE) which was noticing high volatility in the past few weeks had decreased by 108.26 points on the first trading day of the week. Following the massive fall in index points, investors and traders staged protests at NRB’s gates in Baluwatar. Soon after, Finance Minister Janardan Sharma expressed his concerns over the fall in the index point and communicated with the governor of NRB Maha Prasad Adhikari, which increased the index points by a whopping 161.94 points. However, by the third trading day of the week, NESPE index had again fallen by 44.18 points, reaching down to 2936.60 points. During the three days, a total of 56.07 million shares of 224 companies were traded resulting in a turnover of NPR 28.55 billion.

Leave a Reply

Your email address will not be published.