"Impact Assessment of Foreign Banks in Nepal

To Capital Flight"

In the Nepalese banking sector, we have at present 29 commercial banks in which 1 bank is a MNC and 7 banks are of JV – natured. Nepal, along with the entrance in the global arena through liberalization during 1980’s and adoption of one window policy thereafter, experienced several development springs being promoted, aided and operated by and through the foreign development partners. One such development sector among the springs is the financial. More identically, the banking sector where JV’s at those times airlifted the banking revolution through capital injection into the Nepalese Economy.

We know, the primary function of bank is to accept deposits and circulate the same in forms of investments, loans and advances. Technically, the end result of the same phenomenon reflects at the end of FY through which profits, dividends, bonuses, taxes, etc. are announced and when most of such announced returns goes in the basket of development partners. It has been almost and around 30 years, today’s renowned and top banks of Nepal established in the form of JV and MNCs extended branch here in Nepal have awesomely benefited the basket of their promoters more than the capital injected.

It is also not deniable that such banks brought advanced management practices, smart ideas, better governance, modern banking trends and technologies along with them but after all it was only the business they were doing since around 30 years of the liberalized economy. The financial literacy would have been improved subsequently but business on major cities and hubs were beneficial to earn and transfer returns into the basket. In contrast, why would privately promoted and state-owned banks like Janata Bank Ltd., Prabhu Bank Ltd., Global IME Bank Ltd., Rastriya Banijya Bank Ltd., and Nepal Bank Ltd., enter rural sector both to develop financial habit and conduct their respective businesses, knowing the fact that the operation cost is higher than the income earned.

Similarly, deposits collected from hardships and toils of Nepalese depositors are placed/ invested in the foreign banks like HDFC and MASREQ, and others to obtain rates of returns against placements and disclose a well – managed balance sheet instead banks could also have well selected productive sector lending and earned from such businesses and projects (Note that: PSL has been nationally prioritized). Today few Nepalese promoted privately owned banks have higher NPA ratio as compared to that of JVs and MNC banks because of being a risk neutral in the periphery of Nepalese economy.

In a very recent instance, in case of SCBN, the company has been bold enough not to confront with the latest monetary policy (Monetary Policy: FY 2015/16) for increasing their paid up capital up to 8 Billion Nepalese Rupees. Proposed cash dividends with respect to other such returns were announced amidst the Central Bank’s circular. Similarly, NIBL decided and also issued FPO (Further Public Offering) at premium only value adding close to around 1 Billion on its paid up capital after completion of subscription. SBI also declared issuing right share at premium. Such similar instances, have posed ethical threat to the Nepalese policy. This thereby would circulate the Nepalese monetary system and currencies towards outer market beyond domestic territory meaning to the slowing poison to the economy. In fact, we need to understand that the commission/ margin of Nepalese economy’s money circulation are in flight, - intellectually, technically and with the monetary point of view. The effective control and U – turn diversion of such flights can be addressed only by strengthening policy guidelines, regulations, active, strong and vigilant role of supervisors, management for the security of profit returns guarantee from project investments, unbiased political system, sense of national interest and investment friendly environment with binding laws.

In conclusion, there is pretty strong positive correlation between the foreign JVs and MNC bank and capital flights with regards to contribution effect of such in so.

Thank You!

Jeevan Dahal (Jeev Dsk)

Chandragadi 01, Jhapa, Nepal

984191057

jeevdsk@gmail.com, www.jeevdsk.blogspot.com,

#ECONOMIC VENOM

“Tiresome Socio-Political Economy of Nepal – 2015”

I am one among the million citizens of Nepal. And I fall under an active population between 14 to 59 years of age who shares more than a half population of the nation. Of course, I will not be wrong to say that I am an example inside those millions of population badly affected by the haphazard management of political institutions of my own nation.

Hit by a tennis ball sized stone in my face while traveling from one part of the nation to the next and almost deprived of my own life. Yes, I am only a representative of those thousands of fellow travelers, who for multiple reason, should have to cover long and short distance within the national territory. First of all, I am in search of an answer to be justified – why can’t a citizen travel safe and sound within the national territory?

Until today, thousands of long route and short route vehicles (either passenger vehicles, private vehicles or vehicles with supplies) have been hit badly. Even ambulances have been targeted and thus they are being suffered though working for the humanitarian matter. My next inquiry here is to both the institutions (The government and the political ones) – On what ethical basis is the loss to the public transportation justifiable? Has the loss and the chain effect of such losses been estimated so that such losses and effects will be recovered by another alternative relief package is launched? Probably, I would not be wrong enough to predict that such alternative relief packages will never be launched, even never has been pronounced in any of the speeches by both the institutions quoted earlier. However, some economists have been active enough to work out for the same, the actual figures is unknown because the chain effect of such losses will need a sizable financing to the economy.

Similarly, the bread basket of the nation has been severely affected. More than that, thousands of industries have been shut down and even for the longer period of time their strategies of reviving would be very much challenging. The economic activity that contribute to the flow of money has been diverted towards sustenance (for stock saving) and black market economy. At this situation where thousands of industries of every sector have been shut down, and almost negligible economic activities is enduring, people are losing their jobs day-by-day. Again questioning on the same issue is probably not a crime.

How has the Government of Nepal working out to revive such industries once again and create employment on a longer term?

Irrespective of the causes crystal clear to the general public, the lagging of a transition phase have severely created socio-economic and political halts in the nation. Declaration of the 14 severely affected districts of Nepal due to the devastating earthquake of earlier 2^nd quarter of the year 2015 have yet not sensitized in the priority list and the foreign aids have been dormant since long. Almost one third of the GDP were supposed to be required for the nation building strategy only for earthquake sufferers but at today’s date this amount will not be the appropriate allocation for the above. Although drafting of the relief packages and channelizing the funds flow to the victims has been done, it would be very challenging for the same to come into implementation and some sense of realization should be done to ensure that the funds were provided to the end victims (here called the end victims for real victims). Along with the natural disaster, Terai-Madhesh Andolan for more than 4 months and continued Indian economic blockade in the border have led the economy towards an ultimate GDP slowdowns; can also be called as the massacre of the Nepalese economy. Not only an economic problem alone, threat to the human development subjected to the health and education at par has also become a complex issue.

Targeted economic growth rate of 6% is already obstructed (the White Paper has been declared) and targeted inflation rate of just under 8% has already crossed 10% above (Nepal Rastra Bank, December, 2015); in this severe situation one should have understood the level of political demands on one hand and on the other should immediately stop bargaining on the constitutional agendas as constitution is the framework of regulations of any state not any political or any other strategic agenda.

The unclear with the weak diplomatic efficiency of the state to retain the national integrity, sovereignty and the historical constitutional consensus has become a shadow as the citizens are seeking safer and progressive life. Similarly, prudent and effective decision making for the interest of nation and nationality is becoming a life-long question mark in the Nepalese political history. Even resolving efficiency on the state driven affairs as a current issue internally is much more sensitive one which have aroused the current situation. After sensitizing, mentoring and realizing the casual effect of the socio-political condition of Nepal today have eventually derived tiresome socio-political economy, to which without delay should be resolved.

If not solved, it would be a compulsion to inform the general public/ citizens of Nepal; what are the barriers of not resolving the issues? How much more time again we remain as a dependent nation? What are the hidden agendas of the government led political institution, opposition party, agitating parties and the peer governments nearby against Nepalese soil? Why hasn’t any international pressure been developed yet to resolve such issue? Which is the suitable time for a Nepalese citizen to live independently, with higher economic status, higher human development index figures, good health and education?

Jeevan Dahal (JeevDsk)

Cell No: 9841981057

Email: jeevdsk@gmail.com

## Economic_Venom

How can we plan to manage Reconstruction Authority for achieving national target and meet reconstruction and resettlement expectancy?

Reconstruction Authority of Nepal - 2072

Work Functions

1. Plan

2. Resettlement

3. Implementation of Long-term Plan

Allocation of 700 billion budget (74 billion budget now) i.e. One third of National GDP (approx).

Considering the fact that out of 75 districts, 39 districts have been affected by the Mega-quake 2072. The GoN has declared 14 districts problematic for 1 year 2 months before.

My Suggestion Plan:

1. Prioritizing locals and earthquake victims in the sector where capital expenditure is made so that they can be employed in one means and the nation also can achieve target of infrastructure development (transmission line extension, hydel project construction, roads expansion, etc. as included in the national budget FY 2072/073).

2. Resettlement based on sustainability (sustainable growth with employment can be helpful in attaining or tending to attain millennium goal development, help in growth of per capita income, similarly its effect can be seen at growth of national real GDP through production increase and better human development index (HDI) and others' at macro level.

3. Concentrated community based plan for resettlement as per the demography of districts (planned community with demographic concentration avoids remote area land occupancy - target that let people explore the remote areas, tourism promotion at such areas, and let agriculture and farming be based on such unused spaces)

4. Identification of real reconstruction areas apart from resettlement of people like (monuments under listed under conservation plan, historical places and monument icons, etc) - major promotion to target the tourism industries and other productive (handicraft, SMEs' with enhancement on technical skills - OJT also will be the best measure) industries.

Challenges:

1. Good governance, transparency & political lobbing

2. Allocation of small portion of national budget in capital expenditure and lack of effective expenditure of allocated budget

3. Allocation of huge portion of national budget in current expenditure

4. Absence of short and long term plan subjected to budget freeze

5. Meeting target, based on fiscal and monetary policy for growth & attainment of projected indicators

6. Work execution based on trial and error method

7. Effective intra-ministrial co-ordination and communication for development and planning

Jeevan Dahal (Jeevdsk)

Cell No: 9841981057

Email: jeevdsk@gmail.com

##EconomicVenom

“Transforming Policy, Changing Lives”

Every human being is entitled to a life of dignity and opportunity, and it works with worldwide to make this become a reality. It considers the significance of of policy equality in diverse sector of the state; be it economic development sector, education, social values, ethical politics, demographic constraints, technology and state's administrative, executive and judicial mechanisms.

Our world is the composition of high, middle, and low classed people, there isn't any exception. Through equality based policy,  somehow environment of development and peace with fraternity is developable. Education awareness with the sentiment of socioeconomic well-being should be the focus in public policy formulation that would also provide the feeling of security sensation to the people.

To above statements of prominence, I would like to be a part of responsible citizen of the nation (where nation staking questions with suggestions tickles every now and then) where my logical experience shall meet the theme of - “How do we best put the measures of public progress into practice for policies aimed at improving lives?” In Nepal, the initiatives for political participation with huge growth of knowledge economics have been linked – up to widely differing aims and expectations of general public is the real truth. Wisely, the short scenario deserves much more influence to boost planning favorable policies for the change in living-standard of Nepalese people both domestically and internationally.

Name             : DAHAL, JEEVAN

Email Address    : jeevdsk@gmail.com, jeevan.dahal@gbnl.com.np

Title/ Role      : Internal Auditor, Internal Audit Department

Organization     : Grand Bank Nepal Ltd., Kamaladi, Kathmandu, Nepal

                   www.gbnl.com.np, Swift: DCBLNPKA, Cell no. 9841981057

Website          : www.jeevdsk.blogspot.com

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Jeevan Dahal (JeevDSK)

Cell No: 9841981057

jeevdsk@gmail.com,

www.jeevandahal.com.np

OOPS! LIFE ISN’T SIMPLE AS PLANNED

You’d always been messing up with confusions,

You didn’t let me explore to drive confusions out,

I was the open book for you, who disclosed every secrets of the history,

May be my “Table of Contents” were boring, heavy and challenging,

And you hired one in between; close, closer & closest.

Oops! That was thrilling and romantic in the end. #DSK

Jeevan Dahal (JeevDSK)

Cell no.: 9841981057

Written: 1^st Ashad 2072, Tuesday

www.jeevandahal.com.np,

jeevdsk@gmail.com, jeevan.dahal@gbnl.com.np,

Date: Ashad 3^rd 2072 & June 18^th 2015

Jeevan Dahal (JeevDSK)

Cell no. 9841981057

jeevdsk@gmail.com, Jeevan.dahal@gbnl.com.np,

 “LOST BATTLE”

Imaginations come and I fight

No swords, no guns and no bullets

Nonetheless,

No expressions to recover to normalcy

Endless and tiresome and with paleness

Purity and divine and with ethics

Profoundly, I saved the energy

And I didn’t realized, the energy’s swept all away

I fought an already lost battle!

And I never will step back, I am committed to win!!!

“DAY WITHOUT YOU”

There wasn’t a day

I didn’t toss a coin           !!

There weren’t any nights

I didn’t remember while layin’ !!

Just remained silent and secret

And forgot without base: life to climb   !!

Thoughts soared till Tsunami has come

A normal one than turned to dumb         !!!