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Nepal and the Republic of Cameroon have established diplomatic relations. With this, the number of countries with which Nepal has diplomatic ties has reached 180. Ambassador and Permanent Representative of Nepal to the United Nations Amrit Bahadur Rai and Ambassador and Permanent Representative of the Republic of Cameroon to the United Nations Michel Tommo Monthe signed a Joint Communiqué to this effect in a brief ceremony held at the United Nations Headquarters in New York on Thursday. Both the ambassadors had signed a joint letter informing the UN Secretary-General Antonio Gutteres on the establishment of diplomatic relations between the two countries, the Permanent Mission of Nepal to the United Nations said. On the occasion, the ambassadors exchanged views on various topics of common interest to strengthen the bilateral cooperation for the mutual benefit of both countries on national and international forums, especially in the UN forums. Cameroon lies in West Africa and it has more than 240 ethnic communities speaking 230 languages. It shares borders with Chad, the Central African Republic, the Republic of Congo, Gabon, Equatorial Guinea and Nigeria. Cameroon borders the Atlantic Ocean to its south-west. With a population of over 27 million, Cameroon's total area is 475 thousand 440 sq Km. It gained independence on 1 January 1960 and became a UN member on 20 September the same year. Both Nepal and Cameroon are members of the Non-Aligned Movement (NAM).

When Finance Minister Prakash Saran Mahat during the presentation of the budget for the next fiscal year announced that 20 government entities whose presence is no longer essential would be scrapped, many welcomed the government move. The Nepal Intermodal Transport Development Board (NITDB) is on the list of to-be-scrapped entities. As per the budget announcement, the board will be scrapped and its task will be handed over to Nepal Transit and Warehousing Company Limited. But, officials of the Ministry of Industry, Commerce and Supplies (MoICS) are not in favor of scrapping NITDB. One major concern they raise is that handing over the task of the board to the company means that there would be a single entity for both regulation and operation of commercial activities. MoICS officials pointed out another government decision i.e., the proposed splitting of the Civil Aviation Authority of Nepal (CAAN) into two separate entities as service provider and regulator. The government is now preparing to introduce two bills—The Civil Aviation Authority of Nepal Bill and the Air Service Authority of Nepal Bill—to separate the CAAN into two entities. The main reason behind the planned split of CAAN is to remove the situation of conflict of interest and it has been considered vital to ensure the removal of Nepal from the European Commission’s air safety list. MoICS officials also point out the risk of conflict of interest if Nepal Transit and Warehousing Company Limited is also handed over the task of NITDB. Nepal Transit and Warehousing Company Limited currently provides warehousing, clearing and forwarding, and undertaking services. The company provides warehousing facilities at important transit points such as Raxaul in India and Birgunj, Tribhuvan International Airport, and Gautam Buddha International Airport in Nepal for exports and imports in transit to and from third countries. It also provides clearing and forwarding services to Nepali cargoes—in-transit through Indian customs. The company provides a guarantee-undertaking service for the import cargo of Nepal and government-owned undertakings. The major functions of NITDB are to develop and operate terminals for the import and export of goods, enter into agreements with selected companies for the operation of terminal services, and evaluate and monitor terminal management contracts. “In fact, the board is responsible for regulating the task of Nepal Transit and Warehousing Company Limited,” said a senior MoICS official. “Handing over the task of NITDB to the company means the company will have a dual role as a regulator and a service provider which will invite conflict of interest.” The government has clarified that its decision is aimed at implementing the recommendation of the Public Expenditure Review Commission 2018. The commission headed by economist Dilliraj Khanal had also suggested merging the board with the company. The government had long resisted to implement the recommendation of the commission. But the present-day financial realities forced the government to reconsider measures related to reducing expenditures. However, a former joint secretary of MoICS said that even though the government's move to cut costs was a welcome step, it should have considered whether it would lead to a conflict of interest. “The government should have looked at this issue from the example of the current efforts to split the CAAN,” he said.

The Drug Control Bureau of Nepal Police has arrested 12 persons including five foreigners for their involvement in dealing drugs. Organizing a press conference in Kathmandu on Friday, the Bureau said that 12 persons including five foreigners were apprehended for dealing drugs during the operation conducted from June 11 to June 22. The Bureau on June 11 arrested Hemanta Kumar Bhagat of India and currently residing at Sinamangal of Kathmandu in possession of 10 grams of brown sugar. Bhagat, who sustained injuries on his left leg when police opened fire in retaliation after he tried to snatch the gun of police, is receiving treatment at a hospital in Kathmandu. Police also nabbed Sanjeeb Kumar aka Ram Bhajan of India and presently living in Dharan after they found his involvement in dealing drugs during the interrogation with Bhagat. Similarly, DSP Chakra Raj Joshi said that they arrested a German national in possession of seven kg hashish while he was about to leave for Istanbul from the Tribhuvan International Airport. He said that five persons were arrested with 10, 130 pieces of LSD stickers during a special operation. Joshi said that after detaining Sugam Mainali of Chandragiri, Kathmandu with seven pieces of LSD stickers from Satgumti, other persons were also held after carrying out further investigations. The Bureau said that three persons were nabbed with illegal drugs during the investigation. The Bureau said that the market price of the drugs recovered from the arrested persons is more than Rs 233 million.      

Minister for Health and Population Mohan Bahadur Basnet has said that all sides should always remain alert for emergency preparedness. Addressing a program of Emergency Medical Team (EMT) here today, Minister Basnet said, "We all should always remain alert for emergency preparedness. I want to urge all sectors of the country to be involved in disaster preparedness." He asked the health workers to pay attention to ensure rights to health guaranteed by the Constitution. Similarly, World Health Organization (WHO) Representative to Nepal, Dr Rajesh Sambhajirao Pandav, said that EMT was a group formed to provide effective service immediately to the country and people during the disaster. He added the team should be active to save the life of the people making coordination on time during emergency periods. Director General of the Department of Health Services, Dr Dipendra Raman Singh, said 25 hospitals across the country are in position to provide 'Hub Satellite' emergency service. Stating that the workshop was organized to bring 'EMT' into implementation, Chief of Quality Assurance and Monitoring Division Dr Madan Upadhyay said that the discussion would be held for two days on emergency preparedness for disaster.  

An earthquake measuring 4 in the Richter scale was recorded at Bhalayakharka in Rainas Municipality of Lamjung district on Friday. According to the National Earthquake Monitoring and Research Centre, the earthquake that occurred at 5. 55 am today rattled the Lamjung, Tanahun and Gorkha districts. The eastern and western hilly regions in the country have recorded earthquakes more frequently.

While the banks are known for their relatively better corporate governance in Nepal, a new report by Nepal Rastra Bank (NRB) says banks and financial institutions (BFIs) have failed to fully comply with the regulatory directives issued by the central bank in matters ranging from loan disbursement to internal audit. The central bank’s annual report titled ‘Bank Supervision Report’ has pointed out several issues where BFIs have not worked in accordance with the provisions in the laws and regulations as well as directives of the NRB. The report has questioned the role of the BFIs' board of directors and senior management of the institutions. Stating that most of the board agendas are related to credit appraisal or approval, the report says the board has spent less time on discussion of issues of compliance of NRB directives and prevalent laws, implementation of directions of previous NRB inspection, status and implementation of comments from the internal and external reports. “Discussions are insufficient on issues related to the identification, measurement, monitoring, and controlling of inherent risks that the bank faces as guided by the NRB Internal Capital Adequacy Assessment Process (ICAAP) guideline,” states the report. Board minutes, according to the report, reveal that excessive waivers have been provided to borrowers. The implementation status of decisions made and directions given to the management are rarely reviewed by the banks’ board. Some of the banks have not even appraised the performance of their CEOs as per the job contracts. The central bank has raised serious questions over the audit function of the BFIs. The audit committee of the banks has not performed its functions/duties as directed by the Banks and Financial Institutions Act (BAFIA) 2073, Company Act, and unified directives of NRB. Some of the banks lack adequate skilled staff in the audit function. In some banks, the performance appraisal of the head of Internal Audit was found to be done by DGM/CEO involved in credit administration. “This is in violation of NRB Directive 2078 which requires performance appraisal of the internal audit head to be done by the audit committee,” says the report.  The report says banks have also not followed the process of appointing an audit firm. While BAFIA requires the audit committee to recommend three auditors to the annual general meeting (AGM) for appointment of the statutory auditor, audit committees of some banks have selected one auditor and then recommended that particular audit firm to the AGM for approval. The other major issue highlighted by the report is carelessness in the loan disbursement by the banks. Loans disbursed were not found to be used for the intended purpose but were classified as pass category which is non-compliance of the unified directives of NRB.  According to the report, new loans were disbursed to settle existing demand loans/term loans/forced loans, settlement of interest at quarter-end, transferred to the account of sister concern without business transaction, and used to settle loan of sister concern in another bank. Ad-hoc loans are regularly used to settle the existing dues/interest of the loan. “Banks have weak post-disbursement monitoring mechanisms resulting in poor monitoring of utilization of loan after disbursement and so loan has been used for a purpose other than intended,” says the report. Banks have renewed revolving loans without obtaining basic documents required for credit appraisals such as audited financials, tax clearance certificates, firm renewal documents, and business inspection reports.  In many cases, banks have been found to not properly assess the borrowers’ requirements, and instances of over-financing have been observed. Some of the banks have even provided personal loans above Rs 5m without any specific purpose, which is non-compliance with the NRB’s unified directives. Many banks have changed the interest premium to the loan clients against the provision of NRB’s unified directives. In the report, NRB says assets liability committees (ALCOs) of banks are found more in status reporting activities and lack proactive orientation regarding assets liability management. Off-balance sheet items are not generally considered while assessing liquidity position. Most of the ALCO meetings are focused on the revision of interest rates on deposits and loans, publication of interest rates, comparative analysis of market interest rates, and approval of deviation of commission and fees of individual clients rather than on strategic aspects like a review of the investment portfolio, and divestment strategy. The report has also said banks have shown little seriousness over the operational risk.  Trainee interns have been found to be assigned to work in sensitive areas with user access in the core banking system (CBS), which is against the provision of NRB unified directives. According to NRB’s Supervision Department Chief Dev Kumar Dhakal, the central bank supervision has highlighted some of the anomalies in the banking system. “The report will help to control the irregularities,” he said. Nar Bahadur Thapa, former Executive Director of NRB said that there are issues in the lending of the banks. “Rather than properly utilizing the depositors’ money, the banks have been randomly issuing loans,” he said, “And, those who’re getting loans have also not used it properly.” The report says  

• Most of the board agendas are related to credit appraisal or approval
• The board has spent less time on discussion of issues of compliance of NRB directives and prevalent laws.
• Board minutes reveal that excessive waivers have been provided to borrowers. 
• Some of the banks have not even appraised the performance of their CEOs as per the job contracts.
• Some of the banks lack adequate skilled staff in the audit function.
• Banks have also not followed the process of appointing an audit firm. 
• Loans disbursed were not found to be used for the intended purpose but were classified as pass category.
• New loans were disbursed to settle existing demand loans/term loans/forced loans, as well as for the settlement of interest at quarter-end
• Ad-hoc loans are regularly used to settle the existing dues/interest of the loan.
• Banks have renewed revolving loans without obtaining basic documents. 
• Some of the banks have even provided personal loans above Rs 5m without any specific purpose.
• Trainee interns have been found to be assigned to work in sensitive areas with user access in the core banking system (CBS)