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The Nepal Rastra Bank (NRB) has taken action against five commercial banks for non-compliance with rules and directives related to anti-money laundering (AML). The central bank has slapped a fine of Rs 5 million each on four commercial banks while warning a commercial bank. NRB has taken enforcement action against nine commercial banks till the second quarter of the current fiscal year. Of them, Prabhu Bank, Kumari Bank, Bank of Kathmandu (BOK) (now merged with Global IME Bank) and Prime Commercial Bank have been fined Rs 5 million each for violating the law related to money laundering. According to the NRB, Nabil Bank has been cautioned after it was found that the bank failed to implement provisions related to know-your-customer (KYC). NRB Executive Director Dev Kumar Dhakal said that fines have been slapped so that they correct their ways in the coming days. "The four banks have been fined and one bank has been cautioned for their non-compliance to the directives issued by the central bank," said Dhakal. According to NRB sources, actions were taken against these four banks after they did not follow the central bank order to freeze the bank account of Prithvi Bahadur Shah who attempted to bring undisclosed funds earned from criminal activities abroad. Citing some suspicious activities, the central bank had frozen Rs 400 million Shah brought from the US as per the request of a US government agency. Stating that the money sent in the name of Shah was illegally earned, the Financial Crimes Enforcement Network (FinCEN), a US government agency under the Department of Treasury, had asked the Financial Information Unit (FIU) of the NRB to freeze the amount and return it to the US. FinCEN collects and analyses information about financial transactions in order to combat domestic and international money laundering, terrorist financing, and other financial crimes. The Central Investigation Bureau (CIB) of Nepal Police arrested Shah and five others on January 7 on a charge of defrauding millions of dollars through unauthorized entry into the computer systems of foreign nationals. Similarly, NRB has cautioned the CEO of Machhapuchhre Bank for not reporting the correct details of the capital fund according to the capital adequacy framework. Likewise, the central bank has also cautioned Sanima Bank for providing additional facilities to the then CEO Bhuvan Dahal contrary to the provisions of the Bank and Financial Institution Act 2073. The central bank has also cautioned CEOs of Machhapuchhre Bank, Civil Bank and Nepal Investment Bank (now Nepal Investment Mega Bank), on the charge of collecting more interest from borrowers by increasing premiums contrary to the instructions of the regulatory body.

Minister for Foreign Affairs Bimala Rai Paudyal held a telephone conversation with her Turkish counterpart Mevlüt Çavuşoğlu on Wednesday. In the telephone call to the Turkish Foreign Minister, she expressed her deep condolences to those who lost their lives in the devastating earthquake. During the conversation, Minister Paudyal expressed her commitment to provide all possible support to Turkey. On top of that, she urged her Turkish counterpart to move Nepalis living in Turkey to a safe area. Saying that rescue operations are being carried out with the help of international organizations, Minister Mevlüt Çavuşoğlu thanked the Nepal government. More than 11, 000 people died in the earthquake that struck Turkey and Syria on Monday.  

The Nepal government is sending medical teams and essential materials to help earthquake-hit Turkey. The 10th meeting of the National Council for Disaster Risk Reduction and Management held at the Office of the Prime Minister and Council of Ministers on Wednesday made the decision to this effect. During the meeting, Prime Minister Pushpa Kamal Dahal said that Nepal should provide all possible support to Turkey which is a good friend of Nepal. “Turkey is our good friend. The Turkish government had helped us when we were in trouble yesterday. We also have to help the Turkish government. So, let’s help Turkey by sending technical teams and materials,” he said. Deputy Prime Minister and Finance Minister Bishnu Poudel, Chief Secretary Shankar Das Bairagi and Chief of Army Staff Parshuram Sharma among others were present in the meeting. The meeting has decided to make necessary preparations and send the medical teams, medical materials, logistic materials and food products suitable for the environment of Turkey at the earliest. More than 11, 000 people died in the earthquake that struck Turkey and Syria on Monday.  

The Nepal Stock Exchange (NEPSE) plunged by 7. 16 points to close at 2,170. 18 points on Wednesday. Similarly, the sensitive index dropped by 0. 87 points to close at 414. 00 points. A total of 10,502,649 unit shares of 257 companies were traded for Rs 3. 69 billion. Meanwhile, Terhathum Power Company Limited was the top gainer today with its price surging by 3. 32 percent. Likewise, Adarsha Laghubitta Bittiya Sanstha Limited was the top loser with its price dropped by 5. 14 percent. At the end of the day, the total market capitalization stood at Rs 3. 13 trillion.

With the Nepal Rastra Bank (NRB) tightening business refinancing that the central banks arranged for the enterprises affected by the Covid-19 pandemic in 2020, there has been a sharp drop in outstanding refinance facilities. During the first six months of the current fiscal year 2022/23, the central bank has reduced outstanding refinance facilities by more than Rs 100 billion. According to NRB, the outstanding refinance facility as of mid-January of this fiscal year stood at Rs 11.75 billion from as high as Rs 111.96 billion in mid-July 2022. Such a drop in business refinancing occurred after the central bank reduced the scope of providing refinance facilities through the monetary policy 2022/23. As per the monetary policy for the current fiscal year 2022/23, the refinance facility will be continued but will be limited to productive sectors including agriculture, small enterprises, exports, and the sectors still affected by the pandemic. “Such facility will be gradually reduced to the amount available in the refinance fund by mid-July 2024,” reads the monetary policy. NRB adopted the policy citing the use of the cheaper credit received under refinance facility in importing goods which led to depletion of foreign exchange reserves. A senior NRB official said that the refinance facility has now come down more or less to the levels of normal times. Before the central bank announced the refinance facility for the businesses hit by Covid-19 through the monetary policy 2020/21, borrowers used to avail limited business refinancing. The outstanding amount of refinancing provided by the central bank stood at Rs 7.49 billion in mid-July 2020. Of which, the general refinance is Rs 5.88 billion, and refinance to earthquake victims was worth Rs 1.61 billion. With the COVID-19-related closure of businesses hitting most businesses hard, the central bank announced a massive refinance package of over Rs 200 billion to revive the businesses. It approved a refinance facility of Rs 148.75 billion during the fiscal year 2020/21. The outstanding amount of refinancing provided by NRB remained at Rs 122.70 billion in mid-July 2021, according to central bank statistics. As many as 48,890 borrowed benefited from the package in that fiscal year, the NRB said. The large package of refinance facilities was continued in the fiscal year 2021/22 too. The central bank approved the business refinancing of Rs 115.70 billion in the fiscal year, benefiting as many as 24,305 borrowers. Because of cheaper interest rates, people tended to receive refinance packages. The specified sectors including export and sick industry received such facilities at three percent while micro, small, and medium enterprises at five percent. All other businesses received the facility at a five percent interest rate. The central bank officials admitted time and again that this flexible policy to revive the Covid-affected businesses was misused to divert funds to other purposes including procuring real estate and financing imports. With the country’s imports surging, gross foreign exchange reserves decreased by 13.1 percent to Rs 1,215.80 billion in mid-July 2022 from Rs 1399.03 billion in mid-July 2021. Fears spread about the country heading in the direction of Sri Lanka and the government imposed an import ban on certain products including vehicles in April last year.

Samantha Power, administrator of the United States Agency for International Development (USAID), held a meeting with Deputy Prime Minister and Finance Minister Bishnu Poudel on Wednesday. During the meeting, they discussed the strength and longevity of the US-Nepal partnership and opportunities to spur private sector investment. They also discussed increasing clean energy production and advance prosperity for all Nepalis. Power arrived in Kathmandu on a two-day visit to Nepal on Tuesday.

Born in 1960, Krishna Dharabasi is one of the bestselling Nepali writers. He has several books to his credit and they are mostly based on past and present societal issues. Some of his notable works are ‘Radha’, a novel published in 2005, and a short story ‘Jhola’, that was adapted into a motion picture in 2014. He is also a literary critic. Anushka Nepal talked to Dharabasi to find out what he reads, how and why he writes, and whether we are all capable of telling stories. Can you tell us a little about your reading habits? My reading habit is a bit diverse. I used to read ever since I was a child, and back then I was into ready fantasy books. After completing my schooling, I was more interested in reading books based on spirituality. I mostly read books by Dr Narayan Dutt Shrimali, and I still do. I don’t exactly remember the number of books that I have read but I read both fiction and non-fiction. I also read books in Nepali, Hindi, and English. These days, I’m more into audiobooks. It’s quite a comforting feeling. What books are you currently reading? I’ve always read across genres but one thing I missed out on reading was science. I think I’m yet to unlock the mysteries of the world. So currently, I’m reading ‘A Brief History of Time’ by Stephen Hawking. It’s something which I believe will give me a greater knowledge about the reality and the universe we are living in. After finishing this book, I’m planning to dig deeper in the field of science, especially physics. It will be a completely new journey for me. Which are some of your favorite books? It’s difficult to pick my favorites because there are many books that I’ve enjoyed reading. I think that’s true for every reader. But then if I absolutely had to name a few, those would be ‘The Good Earth’ by Pearl S. Buck, ‘Chapaieka Anuhar’ by Daulat Bikram Bista, ‘Atma Britanta’ by BP Koirala, and ‘Shesh Prashna’ a Bengali novel by Sarat Chandra Chattopadhyay. You write essays and stories. Which one do you enjoy more?  I started my writing journey with poems. I wrote a lot of those during my 30s. But then, I wanted to do something different. That is when I decided to work on essays, stories, and novels, but that didn’t happen till I turned 40. Although I have written quite a few novels, my preference has always been essays. Even now, I keep writing essays on different topics, even though none of them have been out yet. I also write descriptive essays on the topic of social issues and politics. I enjoy them. It gives me immense mental clarity When you sit down to write, what do you focus on?  I focus on two things when I write a book. First, I want to explore the issue I’m writing about in depth. I don’t want it to be superficial and vague. Second, I try to highlight the struggles faced by the marginalized community in Nepal. That requires me to understand and empathize with what that community might have gone through. Every time I write, I try to put myself in my character’s shoes. Are you biased towards any of your published works? I’m specially attached to Jhola because it feels personal. I lost my father when I was young, and my mother raised me and my siblings. Just imagine if Sati Pratha was still around at that time. I would have lost my mother on the same day too. Would I have become a writer? Would I have even survived this long? What would have happened to my siblings? All these thoughts inspired me to write this story from the perspective of a son. Do you have any suggestions for aspiring writers? I think, as a writer, it’s important to have vast knowledge of a lot of topics. That will give you an idea for an angle while writing a book. If you read multiple books about the same thing, you will be able to view the same issue in different ways. Then, being able to put things in perspective, in your own way, is what will make you a good writer. So my only suggestion is that you read a lot. Collect as much information as you can and then unleash it all.

The improvement in the country's external sector has continued in the sixth month of the current fiscal year. The new macroeconomic report released by the Nepal Rastra Bank (NRB) on Monday shows the country's forex reserves, balance of payment (BOP), tourism income, and remittance inflow have improved noticeably. Economists attributed the improvement to the policy efforts of the government and the NRB to control imports and credit expansion. According to them, the challenge now is to maintain the pace of improvement. Despite the easing of the liquidity situation, businesspersons have not been able to borrow money from banks due to the high-interest rates and restrictive arrangements in the working capital loan guidelines. As per the NRB report, Nepal's BOP is at a surplus of Rs 97.10 billion in the first half of FY 2022/23 compared to a deficit of Rs 241.23 billion in the same period of FY 2021/22. The BOP had turned surplus in mid-October, 2022 after a gap of 14 months. In US Dollar terms, the BOP remained at a surplus of Rs 734.4 million in this fiscal compared to a deficit of 2.02 billion in the same period of the last fiscal. The country's forex reserves increased by 10 percent in the first six months of the current fiscal year. Nepal's forex reserves stood at Rs 1337.29 billion in mid-January, 2023 (Poush) from Rs 1215.80 billion in mid-July 2022. In US dollar terms, the gross foreign exchange reserves increased by eight percent to Rs 10.30 billion in mid-January 2023 from Rs 9.54 billion in mid-July 2022. In the report, NRB has stated that the current level of foreign exchange reserves is sufficient to cover merchandise imports for 10.4 months, and merchandise and services imports for 9.1 months. According to NRB, remittance inflows have increased by 24.3 percent to Rs 585.08 billion in the first six months of the current fiscal year compared to a decrease of 5 percent in the same period of the last fiscal year. In US Dollar terms, the inflows increased by 13.9 percent to 4.5 billion in the review period against a decrease of 5.7 percent in the same period of the previous year. Meanwhile. the government's current account deficit (CAD) has also narrowed significantly in the last six months. As per the NRB report, CAD has now come down to Rs 29.47 billion which was Rs 352.16 billion in the same period of the previous year. Stating that the country's external sector is in a comfortable position, economists suggest that the government now needs to increase capital expenditure to take the economy out of the recession. Former governor of NRB Dipendra Bahadur Kshetri said that the current economic situation of the country should be taken cautiously. "While remittance has been the major source of the forex reserve, the country has failed to bring in foreign direct investment," he said. Inflation slows down slightly The NRB report shows consumer inflation has declined slightly in Poush (mid-December to mid-January) compared to Mangsir (mid-November to mid-December). Consumer inflation stood at 7.26 percent in mid-January compared to 7.38 percent in mid-December. Food and beverage inflation stood at 5.62 percent whereas non-food and service inflation rose to 8.57 percent. Under the food and beverage category, the price of the restaurant and hotel sub-category increased by 15.56 percent, tobacco products by 11.81 percent, cereal grains and their products by 9.56 percent, milk products and eggs by 9.70 percent, and alcoholic drinks by 8.84 percent. Under the non-food and services category, the price of transportation sub-category increased by 16.43 percent, health by 11.22 percent, recreation & culture by 8.76 percent, and furnishing and household equipment by 8.33 percent. According to NRB, the rate of inflation in the Kathmandu Valley, Terai, Hill, and Mountain belts surged to 6.93 percent, 7.49 percent, 7.30 percent, and 6.69 percent, respectively.

• BOP is at a surplus of Rs 97.10 billion
• Forex reserves increased by 10 percent to Rs 1337.29 billion
• Remittance inflows have increased by 24.3 percent to Rs 585.08 billion
• Forex reserves is sufficient to cover merchandise imports for 10.4 months, and merchandise and services imports for 9.1 months