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With Nepal Rastra Bank adopting tighter monetary policy along with a slowdown in loan demand, the commercial banks’ lending grew by a marginal 3.42 percent in the last fiscal year. 

The commercial banks that experienced a liquidity crunch in the first half of the FY 2022/23 saw problems of non-disbursement of loans in the second half of the last fiscal. Bankers said demands for loans have remained low throughout the last fiscal. 

While the NRB had targeted private sector credit growth to 12.6 percent in 2022/23, the actual credit growth remained much lesser than the target. In fact, the credit expansion to the private sector in 2022/23 was far less than what the banks lent in 2021/22. The banks’ lending grew by 3.42 percent in 2022/23 compared to 12.2 percent in 2021/22.

According to bankers, the private sector has not sought bank loans with the deepening economic downturn. On the other hand, retail loans such as housing loans and auto loans did not grow due to higher interest rates. While the BFIs gradually lowered the loan interest rates, the demand for loans did not surge as expected.

According to the data of the Nepal Bankers Association (NBA), commercial banks disbursed loans amounting to Rs 144bn in 2022/23 whereas such loan disbursement in 2021/22 stood at Rs 454bn. The total lending of banks by the end of the last fiscal year stood at Rs 4,318bn. 

“The demands for loans have remained subdued due to the state of the economy and businesses,” said Sudesh Khaling, CEO of Everest Bank, “In the initial months of the last fiscal, credit flow could not increase due to a lack of liquidity in the banking system. Later, when the liquidity situation improved, there was no demand for loans.”

Bankers say the other reason behind the sluggish lending is banks have become more cautious in loan disbursement due to a sharp rise in non-performing loans (NPLs).

According to the private sector, the high-interest rates also contributed to lower demand for loans. The private sector has been demanding that interest rates need to be lowered arguing that the average interest rate of loans remained higher that previous years. 

Deposits of commercial banks increased by 12 percent in 2022/23. The banks’ deposits stood at Rs 5,086bn in mid-July 2023 from Rs 4,541bn in mid-July 2022. The banks’ deposits increased by Rs 545bn in the last fiscal.   

After going through a liquidity crunch in the first half, the banking system was flushed with excess liquidity by the end of the last fiscal. With demands for loans drying up, investable capital piled up in the banking system in the last few months of 2022/23. 

With lesser demand for loans, the CD ratio of commercial banks came down to 82.10 percent in mid-July 2023, which was 88.07 percent in mid-July 2022. As per central bank regulatory norms, banks can disburse 90 percent of their deposits in loans. Banks have to maintain the credit-to-deposit ratio (CD ratio) at 90 percent. 

The Kathmandu Metropolitan City (KMC) has urged taxpayers to pay tax on their businesses within the determined time.

Issuing a notice, the Department of Revenue of the KMC requested to pay tax and get a discount facility. The KMC has offered exemption in property tax, rental tax and business tax.

The notice reads that 10 percent exemption has been offered on the tax amount of the current fiscal year if it is paid within January 14, 2024.

Similarly, additional 30 percent discount would be offered in the case of taxpayers who have operated a hotel, resort or movie theater on their own land or taking such facilities already constructed on lease in the metropolitan city, if they pay property tax with arrears by mid-January 2024.

It is stated that property tax of the parking lot of a building constructed with the purpose of commercial parking of vehicles would be exempted for 10 years from the date of completion of the building construction.

There is a provision of 95 percent discount on business tax and registration fees of an industry or enterprise operated under the 'One Ward, One Model Industry' program for three years after the registration of the industry or business.

A 40 percent tax exemption on the total tax amount has been provided to industries, businesses, companies, organizations registered in the name of women and people from the indigenous nationalities and Dalit communities, people with disabilities of whichever age group and youths below 35 years of age and which are not under tax coverage in the Fiscal Year 2080-81 BS, which have capital investment up to Rs 500,000, if they pay the tax within January 14, 2024.

Similarly, a 25 percent tax exemption has been provided in the case of regular tax-payers.

However, individuals who are the permanent residents of Kathmandu Metropolitan City will get a 50 percent tax exemption on such tax if they pay the tax within the stipulated date.

The Pashupati Area Development Trust (PADT) has come under scrutiny for leasing out large tracts of land at nominal rates to various agencies, raising suspicions of irregularities. 

Jagat Deuja, a member of the National Land Commission, said that the commission was currently examining a report prepared by the PADT regarding its land and property. The investigation includes a review of lands leased out to other agencies, as well as those that have been encroached upon.

One notable case involves the leasing of 1,161 ropanis to the Tribhuvan International Airport (TIA) for a 99-year contract. According to the agreement signed in 2017, TIA is required to pay Rs 10m annually to the PADT. Prior to this agreement, TIA was paying a meager amount equivalent to only one muri three pathis of paddy (approximately 80 kg) per ropani as leasing fee.

The Tilganga Eye Center is another entity that has taken five ropanis of land from PADT on a 49-year lease, with an annual leasing fee of Rs 40,000 per ropani. Although the lease agreement was signed in 2015, the center had been using the land even before that period.

In addition, the PADT has struggled to receive the leasing fee for one ropani of land being used by Gaushala Dharmashala which has been utilizing the land for over 80 years. The leasing contract with Gaushala Dharmashala was signed about 20 years ago, and as per the agreement, PADT is entitled to receive Rs 51,000 annually as leasing fee.

PADT’s land has also faced encroachment by various individuals and groups. Approximately 100 ropanis out of the total 534 ropanis of land in Gothatar have been encroached upon by so-called squatters. Additionally, there have been attempts by various groups to gain control of the land for operating sand quarries.

Finance Minister Dr Prakash Saran Mahat said that the government will provide full support to the probe committee to investigate the gold smuggling case in an independent manner.

Inspecting the Tribhuvan International Airport on Thursday, the finance minister said that some staffers have been suspended after the gold smuggling case, expressing commitment to allow the probe committee to investigate the case independently.

He claimed that the probe committee will find out whether it is the machine or the human weakness in the gold smuggling case.

Minister Mahat said that he has directed the authority concerned to bar the entry of unauthorized persons in the Customs Office.

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Saying that the people could use new technologies to commit crime, he opined that the technologies in the customs office should also be changed as per the time.

Minister Mahat further said that he has already held discussions with the concerned authorities of the airport for the same.

Finance Minister Mahat had inspected the arrival, departure and customs area of the airport.

Deputy Prime Minister and Home Minister Narayan Kaji Shrestha had also inspected the customs area after the gold smuggling case.

Earlier on July 20, the Revenue Investigation Department had recovered around 100 kg of gold that passed out of airport’s customs without being detected from Sinamangal.

The price of gold has increased by Rs 800 per tola in the domestic market on Thursday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 113, 500 per tola today. It was traded at Rs 112, 700 per tola on Wednesday.

Meanwhile, tejabi gold is being traded at Rs 112, 950 per tola. It was traded at Rs 112, 150 per tola.

Similarly, the price of silver has increased by Rs 35 and is being traded at Rs 1, 490 per tola today.  

The Commission for the Investigation of Abuse of Authority (CIAA) is delaying investigation into the alleged misuse of approximately Rs 4bn released for the salary and well-being of Maoist combatants kept in cantonments.

The investigation had remained dormant for nearly two years, during which the CIAA could only obtain expenditure details related to the Maoist combatants from the Ministry of Peace.

As per the information provided by the ministry to the CIAA, a total of Rs 9.79bn was spent on the salary and well-being of Maoist combatants over a span of nine years. Out of this amount, Rs 5.88bn was allocated solely for paying the salaries of these combatants. Additionally, Rs 2.76bn was utilized for logistics, Rs 261m for infrastructure development, and Rs 273.71m was allocated for other miscellaneous expenses, according to the letter sent by the ministry to the CIAA.

The CIAA took a policy decision to investigate the incident after it concluded that the funds released for Maoist combatants by the then Army Integration Special Committee had been misused. The individuals under investigation include former Maoist Chairman Pushpa Kamal Dahal, former Prime Minister Dr Baburam Bhattarai, former Minister Krishna Bahadur Mahara, and other Maoist commanders.

The Maoist party has been accused of embezzling tens of millions of rupees from the national treasury by creating fake combatants. Initially, there were 32,250 combatants in various cantonments after the Comprehensive Peace Accord (CPA) was signed between the Maoist party and the government in 2006. However, the United Nations Mission to Nepal (UNMIN) verified only 18,500 of them as legitimate combatants. Subsequently, around 4,000 soldiers under the age of 18 were sent home. Even though UNMIN verified 19,600 as Maoist combatants, during the categorization process for integration into the Nepal Army or reintegration into society, only 17,074 combatants were present, approximately 3,000 less than the verified number.

Since the beginning of the peace process, over Rs 20bn has been spent on managing Maoist camps and supporting the combatants over a period of six years.

CIAA investigation has concluded that approximately 50 percent of the verified combatants were found to have been created solely for documentation purposes, intending to misuse state resources. The Maoist party has been accused of generating fake documents for around 3,000 soldiers who never actually existed, all in an effort to embezzle their salaries.

Complaints filed at CIAA state that salaries of about 6,000 soldiers have been embezzled over a period of nearly five years.

Tokha Municipality has dismantled illegal structures constructed by encroaching government and public lands.

The local government has launched a drive to demolish structures built unlawfully on public areas. 

Mayor Prakash Adhikari said that the local government had previously issued  public notices multiple times and held interactions  with the people responsible for encroaching on public land with a request to voluntarily remove illegal structures.

"We are compelled to bulldoze the structures as our calls for cooperation went unheard." 

The mayor stressed that public land must be under government protection and its use for personal interests is not permitted.

Police on Wednesday arrested an Indian national for his alleged involvement in robbing the NMB Bank in Mahottari Rural Municipality of Mahottari.

The arrestee has been identified as Ajay Kumar Safi (20) of Bihar.

Police said that he was a member of a group that robbed Rs 1.5 million from the NMB Bank.

He was apprehended from the Nepal-India border at Matihani-8 yesterday, DSP Dilip Kumar Giri, spokesperson at the District Police Office, Mahottari said.

Earlier on May 30, a group of four to five masked persons who came on motorbikes robbed the bank by taking the staffers and customers captive.

Police have been searching for the gang since the day the crime took place.

Meanwhile, police said that they identified the other accused in the crime and are intensely searching for them.

Inspector Prakash Malla said that they will be arrested soon.