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A committee formed by the board of the Nepal Rastra Bank (NRB) to identify and resolve the problems concerning microfinance institutions (MFIs) has sought feedback from the public. The committee headed by NRB Executive Director Prakash Kumar Shrestha, who is the Chief of the Economic Research Department of the central bank, issued a notice on Sunday for feedback to be submitted by May 3. As protests erupted over alleged excesses by MFIs in various parts of the country, the central bank decided to form the committee which has been mandated to identify the problems and make necessary recommendations by mid-July this year. A committee member said that the problems appear to have arisen mainly due to multiple banking by MFIs to the single borrower. “Even though many borrowers have complained about the high borrowing rate, it should not be a big issue as the MFIs cannot charge interest rates exceeding 15 percent,” the committee member said. Because of the cap imposed by the central bank, MFIs could not raise the interest rate beyond 15 percent despite the rise in the cost of funds sharply amid the liquidity crunch. Borrowers who protested against the alleged misconduct of MFIs claimed that the institutions have been charging exorbitant interest rates, high service charges, and misbehaving with the borrowers. But promoters and high officials of MFIs have been rejecting the accusations of charging high interest rates while admitting that multiple banking transactions might have taken place. “Profit motives of many MFIs and a high target of lending assigned to the staffs might have led to multiple banking,” the committee member said. Many borrowers had managed to pay the loans in the past despite taking multiple MFIs in the past. But because of the closure of the businesses caused by the Covid-19 pandemic, they could not pay the loans immediately, but their liability continued to grow as cash flow halted due to the closure of the businesses, say officials of NRB and MFIs. With the borrowers failing to pay the loans, MFIs are being compared to loan sharks who charge very high interest rates for the money loaned informally to borrowers. With controversial businessperson and hospital owner Durga Prasain calling for physical attacks against the employees of the banks and financial institutions, a number of offices of MFIs and their staff faced physical assaults and vandalism in recent weeks.  

CPN-UML leader and former IGP Sarbendra Khanal has filed his nomination for the by-election in Tanahun. He filed his nomination by reaching the election officer’s office on Monday afternoon. Bhagwati Neupane proposed his candidacy while Ek Bahadur Rana seconded the proposal. The Election Commission is holding the by-election in Tanahun-1 after Nepali Congress lawmaker Ram Chandra Paudel was elected as the President of the country. Govinda Bhattarai from the Nepali Congress and Swarnim Wagle from the Rastriya Swatantra Party are preparing to file the nominations.    

A writ petition has been filed at the Supreme Court against Rastriya Swatantra Party President Rabi Lamichhhane. Yubaraj Paudel ‘Safal’ on behalf of the Nepali citizen had moved the apex court on Sunday saying that Lamichhane obtained the Nepali passport when he was a US citizen. The hearing has been scheduled for Tuesday. Paudel has demanded an interim order in the name of the defendant. Earlier, the Supreme Court had scrapped Lamichhane’s lawmaker post after he was found guilty in the citizenship case.

Ever since the homework for cabinet expansion began, the name of Prakash Saran Mahat as the new finance minister was doing rounds. And, on Friday it became official as Prime Minister Pushpa Kamal Dahal gave him the responsibility of the Finance Ministry. Mahat's entry into the Finance Ministry has come at a critical juncture with the government struggling in revenue collection and resource management, growing discontent of businesspersons against banks and financial institutions, and rising bad loans in the financial sector. While the continued recovery of the country's external sector is expected to give some breathing space to the new finance minister, declining imports and the slowdown in economic activities have put the government's budgetary operation, primarily in revenue collection, in a shaky position. The government revenue has declined drastically over the last couple of months as economic activities in the country have come to a grinding halt. The private sector's displeasure over high-interest rates is yet to subside and the financial sector is facing a possible storm in the form of rising bad loans and problems in loan recovery. The challenges in front of Mahat are not different from his predecessor Bishnu Poudel who had to leave due to the breakup of the earlier ruling alliance when he was trying to install much-needed urgency in the system. Now, Mahat has to start from where Poudel has left and bring the crisis-ridden economy on track. Taking a clue from Poudel who'd reach out to the private sector as well as the Nepal Rastra Bank governor, Dr. Mahat while assuming office on Friday tried to strike the right chord by saying that he is expecting support and collaboration from all stakeholders. "The entire state mechanism will work to resolve the current economic crisis. There should be coordinated roles of the central bank and Finance Ministry for resolving the issues," he said on Friday. The statistics show a deficit in government budgetary operation due to the widening gap in revenue collection and expenditure. As of April 2, the government's budget is in deficit by Rs 180 billion. The income of the government is Rs 655.22 billion while the expenditure has crossed Rs 836 billion. It is increasingly becoming difficult for the Finance Ministry to meet current expenses from the income of the government. "The revenue collection and foreign assistance have not risen according to the target. On the contrary, the government's expenditure has increased massively," said economist Chandramani Adhikari, "There must be concrete steps taken for resource management." According to him, the government should emphasize the collection of arrears as well as plug the revenue leakages to increase resources. By announcing a committee to formulate a cash flow plan on Friday, newly appointed finance minister Mahat has shown he is aware of the problems. The committee will be led by the chief of the budget and program division of the ministry. The committee will have representation from Financial Comptroller General Office (FCGO), Nepal Rastra Bank, and the Public Debt Management Office. Given the high-interest rates, lending of BFIs has remained dismal as the private sector held back their new investment plans. And, the country's economic growth in the first quarter is limited to 0.8 percent. The private sector says improving government expenditure to increase cash flow in the market has to be done urgently. "The money flow in the market has been severely disrupted. The government has to spend to increase the cash flow in the market. However, the government's income is not as per the target," said Pashupati Murarka, former President of Federation of Nepalese Chambers of Commerce and Industries (FNCCI). Economist Bishwas Gauchan is of the view that structural reforms are needed to resolve the current crisis. "Though there has been some improvement in the economy due to the government's tightening of imports. However, in reality, the problem is where it lies," he said, "To resolve the problem in the long term, structural reform is necessary." According to Gauchan, Nepal's economy has been based on remittances for a long time. "Now we need to find an alternative to remittances to boost the economy," he said. Gauchan pointed out that most of the loans have been used for consumption activities, for buying real estate and vehicles and not for the productive sector. "Now, there must be a policy to use banks' loans to productive sectors while discouraging loans to the real estate sector,'' he said. Immediately after his appointment, Dr. Mahat reached out to the central bank governor Maha Prasad Adhikari as well as telephoned leaders of the private sector bodies. This has given a positive message. But his real test will begin as he sits down with his team at the finance ministry for drafting next fiscal year's budget. How he will manage the expectation of the private sector that wants interest rates in single digits as well as manage prudency in fiscal management will be crucial. His brother and former finance minister Dr. Ram Saran Mahat is still remembered for prudent fiscal management as he guarded the state treasury with zeal. Will the new finance minister take a cue from his celebrated brother?

The price of gold has dropped by Rs 600 per tola in the domestic market on Monday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 108, 000 per tola today. The yellow metal was traded at Rs 108, 600 per tola on Sunday. Meanwhile, tejabi gold is being traded at Rs 107, 500 per tola. It was traded at Rs 108, 100. The price of silver has dropped by Rs 20 and is being traded at Rs 1, 390.

Continuing the upward momentum in 2023, the tourist arrivals in March have hit a four-year high signaling that tourism in Nepal has largely recovered from the impacts of the Covid-19 pandemic. The latest statistics of the Nepal Tourism Board (NTB) show tourist footfalls in March 2023 stood at 99,426, the highest since March 2019. According to NTB, Nepal welcomed 42,006 tourists in March 2022, 14,977 tourists in March 2021, and 42,776 tourists in March 2020. According to NTB statistics, 227,755 tourists visited Nepal in the first three months of 2023. Tourist arrivals have surged by 35 percent in March compared to February. Nepal welcomed 55,074 international visitors in January, 73,255 in February, and 99,426 in March. While the number of Chinese visitors is gradually improving, Nepal received the highest number of tourists from India and the US in March. According to NTB, 25,911 Indian tourists and 9,557 US visitors came to Nepal in March. The country welcomed 6,133 tourists from the United Kingdom, 4,149 from Germany, and 3,898 from Sri Lanka. While there has been a huge improvement in tourist arrivals this year, it is yet to touch the pre-Covid era. Nepal received 311,047 tourists in the first three months of 2019. The arrival of foreigners in the first three months of 2023 is 73.22 percent compared to the same period in 2019. With the easing of travel restrictions and China reponing outbound travel for its citizens, Nepali tourism entrepreneurs are pinning high hopes for 2023. NTB on its 24th anniversary announced that it aims to attract at least one million foreign tourists in 2023. In 2022, tourist arrivals reached over 600,000 without any significant contribution from China. Only 9,595 Chinese tourists visited Nepal in 2022. Tour operators say they are receiving increasing inquiries from major source markets including China of late. While the FITs (free independent travelers) have already started coming to Nepal, group travelers from the northern neighbor are yet to come here. With Nepal finally included in the list of the countries where Chinese travel agencies and online travel companies are allowed to resume, on a pilot basis, outbound group tours for Chinese citizens, travel trade entrepreneurs are expecting a surge of visitors from the northern neighbor. Travel trade entrepreneurs say that a significant contribution of Chinese tourists would be required if Nepal wants to meet the target of one million in 2023. The tour operators expect Nepal to be included in the next list of China's destination countries hopefully as early as possible. China was the second largest source market for Nepal after India before the Covid-19 pandemic.  

Rastriya Swatantra Party President Rabi Lamichhane filed his nomination for the by-election of Chitwan-2. Metropolitan Coordinator Sita Gyawali proposed his candidacy while Bharatpur-11 Coordinator Bikram Shrestha seconded the proposal. Lamichhane had reached the election officer’s office along with a rally from the party’s publicity office at Bharatpur-11. The Election Commission is holding the by-election in Chitwan-2 after the Supreme Court scrapped Lamichhane’s lawmaker post saying that he had never applied to reclaim his Nepali citizenship after renouncing this American citizenship. Nepali Congress incumbent District President Jit Narayan Shrestha will file his nomination at 1 pm today for the election slated for April 23.

White paint sprinkled over the darkness Constellations shine in the night skies, But even if one loses its brightness, It swallows up the white eyes. White paint sprinkled over the darkness, Your love shines in my soulless eyes, But if one day you evanesce into nothingness, I will follow your path to my demise. Abhigya Shrestha Grade: 10 Rato Bangala School, Patan