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We Nepalis just love sequels, don’t we? At least our filmmakers seem to think so. Because for almost every Nepali movie that has made an inkling of profit in the past few years, there’s been (or have been) sequel/s. There’s one particular thematically romantic Nepali movie which is set to reach the half-dozen milestone in sequels.

Not that we’re complaining, but when you just put in numbers after names and repeat the same motif film after film, your lack of ingenuity starts to bore the audience, and the credibility you earned from the first film is overshadowed. Only a limited few can become Francis Ford Coppola and dish one after another “Godfather”—but even so the latter films got their fair share of criticism.

So, our YouTube selection for the week “Jatrai Jatra” (2019), a remake of the 2016 hit film “Jatra”, falls under the category of sequels gone bad. The original Jatra was a well written, well executed heist comedy that left the audience in fits of laughter in theaters and later at home via YouTube. It was an original movie with a rather unoriginal plot but with so much imagination put into it that the audience couldn’t exactly put a finger on what was wrong with the film. But the sequel—Jatrai Jatra—although staying true to its comic spirit and attempting to recreate the hilarity of the first, tarnishes its legacy.

Our lead trio—Fanindra (Bipin Karki), Munna (Rabindra Jha) and Joyes (Rabindra Singh Baniya)—are released from jail three years after their Rs 30-million incident in the first part. Having learnt a valuable lesson, they try to resurrect their lives but find themselves in shambles. The trio, united by greed and opportunity, thus part ways to try and live a normal life and get back what they have lost.

But fate has other plans. After trying a host of other jobs, when Fanindra finally ends up as a taxi driver for Taxi Sahu (Rajaram Paudel), a mishap involving his passenger for the day, Dawa (Daya Hang Rai), leaves him in possession of 10 kilos of gold. Once bitten twice shy, Fanindra wants to get rid of the gold but then his greed and the recollection of his financial and family situation gets the better of him. He decides to keep the gold and thus begins another set of comedy of errors that entrench his friends, family and a bunch of goons.

Written and directed by Pradip Bhattarai, Jatrai Jatra banks on the acting skills of its three lead characters and makes them run through confusing situations and conflicting moments to recreate the chaotic coherence presented by Jatra. But coherent, this movie is definitely not. Jatrai Jatrai feels like the makers hurried a bit too much to recreate the success of the original Jatra and in doing so, left too many loose ends

My biggest complaint with the movie is regarding how the continuity breaks and lapses, which could have been easily avoided, passed the final cut. How could a bunch of industry veterans make so many novice errors unless they were deliberate, which is clearly not the case. It feels like the makers got so cocky with the success of Jatra, they forgot that the audience should not be taken for granted.

Acting-wise, there’s not much to complain about. The trio of Karki, Jha and Baniya recreate the roles of simpletons-turned-criminals with the same sincerity. One noticeable change is that their characters have become more cunning after the jail term and it reflects in their acting. How we wish filmmakers showed more conviction to character development and not just let their principal characters enact the same tomfoolery even after so much experience. This is the problem with Nepali sequels. Once they’ve established a character, they never let them grow, which with time gets boring and repetitive.

Who should watch it?

The harsh criticism of Jatrai Jatra is the result of its comparison to the original. As a stand-alone movie, it is definitely more entertaining than most films released around the same time. Much more entertaining than let’s say 70 percent Nepali movies we’ve reviewed so far. If you like Nepali comedy movies, there's a high possibility you will enjoy Jatrai Jatra.

Genre: Comedy
Rating: 2.5 stars
Actors: Bipin Karki, Rabindra Singh Baniya, Rabindra Jha
Director: Pradip Bhattarai
Run time: 2hr 17mins

Saral Urja, initiated as a startup by a group of professionals working in the energy sector, was registered in 2013. But the founders only started operations in 2015. 

When the country had been facing hours of daily load-shedding, inverter and solar companies flourished to meet the demand for backup energy sources. 

But when Kul Man Ghising took over the management of Nepal Electricity Authority in 2016, power cuts became a thing of the past and so did the brisk business of inverter and solar companies. 

“We were the happiest at the time as our goal was to become a solar company with a difference,” says Aashish Chalise, CEO of Saral Urja Nepal. “We believe that solar-powered solutions are not necessarily alternative forms of energy. They are mainstream energy sources that need more exploration.” 

Just importing and installing solar panels, inverters, and batteries was never part of Saral Urja’s business plan. Instead, the company’s focus is on management, financing, and integration to help households and companies build their sustainability strategy, meet energy efficiency goals, and manage their overall energy requirement. 

In rural off-grid areas as well, the company has implemented multiple solar microgrids and solar water pumping projects. Saral Urja’s first project in Dubung village, Tanahun, is an example of its business model. The company built an 18kw micro-grid in 2015, right after the earthquake and during the Indian blockade. It helped bring light to 150 households. The project, implemented under the 5P model (pro-poor, private-public-partnership) was funded by government grants as well investments from the locals as well as Saral Urja. 

The company is currently building customized grid-connected systems for its clients. “Energy is being decentralized around the world and we are sure Nepal will catch up,” says Chalise. “We do not provide an alternative to hydroelectricity but we help our clients reduce their electricity bills by owning a system that helps them produce electricity.” 

In coordination with the NEA, Saral Urja has also introduced ‘net metering’—a system that allows users to sell the excess electricity created by their solar systems to the authority. “Simply explained, you can install a solar system at home or in an industry, zero down your electricity bill, and also produce enough electricity to sell to the NEA for profit,” says Chalise. 

He offers another example to explain the economics of his business. For an average household that gets a monthly bill of around Rs 8,000-Rs10,000, six to seven kilowatts of solar system can help slash the bill considerably. Depending on variables, the installation cost comes to about 

Rs 100,000 per watt. So, the household can achieve its break-even point in a few years and enjoy the benefits of renewable energy for decades, thus saving millions. The proposition is even sweater for industries. 

Also, for industries and commercial buildings which can’t make a large investment on solar systems upfront, Saral Urja uses the RESCO (Renewable Energy as a Service Company) model, already popular worldwide. 

Under this model, if a factory wants to install a solar system, Sara Urja will do it at their own cost and then sign a power purchase agreement through which they will send the industry a monthly bill. The bill will be much less than that of NEA, Chalise explains. 

Saral Urja has also managed to raise Rs 350 million in foreign direct investment. This fund will help the company jumpstart its rooftop program and build an approximately 8 MW of rooftop solar distributed in multiple geographic locations within the next 18 months.

“We already have a 25 MW plan, which we will scale to 70MW in the next five years,” Chalise informs. “Eventually, Saral Urja will list as a public company.”

In an article titled “A peek into the World Cup betting racket” published in June 2018, ApEx had discussed a ‘rare group of gamblers’ who were betting via international bookmaking sites using the crypto-currencies banned in Nepal.

Tiwari, an IT student and a self-styled “crypto trader” who wishes to be identified only by his surname, had spilled the beans on how Nepal’s crypto-trading youths had found a way to illegally load their international betting accounts using crypto-currencies. Tiwari used to transfer crypto-currency from crypto-wallet Bittrex to the betting site 1xBet, converting them into dollars.

Three years later, the ‘rare group of gamblers’ is rare no more, Tiwari tells us, although tracking and talking to them was extremely difficult for ApEx this time. Still, following some groups on Facebook, Twitter and Telegram, we found out that the number of crypto-traders in the country has increased, and so have gamblers using international websites.

Between our conversation with Tiwari in mid-2018 to now, he claims to have lost close to Rs 40 million on sports betting alone. “I lost everything I earned from crypto-currency trading,” Tiwari says. “I had earned a lot in the bullish market when the Bitcoins I bought for $2200 reached $64,000.” Tiwari had become a full-time crypto-trader, staying online most of the time. Gambling was entertainment at the start. Then it got addictive to the point that he was doing it all the time, eventually losing almost all his crypto holdings. 

Hassle-free betting

Most betting websites need users to verify their accounts by uploading their passports and even bank statements. Unverified betting accounts are at the risk of being shut down anytime and holders can’t make withdrawals in case they win. “But 1xBet is the best for Nepalis,” Tiwari says. “You can register without any complications, and loading the account with crypto-currency takes just five minutes.”

Tiwari knows of many other users making deposits on the 1xBet site through crypto-currencies. But even more are using the local wallet Khalti, he says. During the last Euro Cup (June 11-July 11), Khalti got some attention on social media when a few people posted about how it was being used to deposit money into 1xBet accounts locally. (The Cyprus-based company’s website still has a notice, in both Nepali and English, mentioning the Khalti app.)

Amit Agrawal, the co-founder and director of Khalti, refutes all links between Khalti and 1xBet. “We were shocked when we found out,” says Agrawal. “This has nothing to do with Khalti. It’s just that some unscrupulous users have been making transactions through our app.” Agrawal informs that Khalti has already sent legal notices to 1xBet and is also working with Nepal Rastra Bank to identify and penalize offenders. The repeated use of Khalti accounts on the betting site has harmed the brand’s image and continuous monitoring of transactions after the discovery is costing the startup precious time and resources. Khalti has already suspended around 1,500 accounts.

As most transactions on digital wallets like Khalti are done by individuals, it is difficult to trace which users are using their accounts for betting. Also, crypto-currency transactions are mostly untraceable as the whole structure of the Blockchain lets its users remain anonymous. Moreover, most users also mask their IP addresses.

Ishwar, an employee at a private company, says sports-betting is a good side hustle. “If you are a disciplined gambler, you can earn a significant amount of money,” he says. But Ishwar himself has lost more than Rs 100,000 in under a year. Still, he finds the prospects of making money through gambling enticing and feels it should be legalized and regulated.

A Khalti user in the past, he is now using local agents to load his betting account. “There is so much money going out and coming in through betting sites,” Ishwar says. “Only if the government regulated it, it could earn a lot of revenue through taxes.” Besides taxes, localized betting houses could also create jobs. 

Why not legalize?

Another “gamester” Durgesh, who also spoke on the condition of anonymity, had met Ishwar via a social media group where like-minded youths like him speculate on upcoming sporting events. The group’s discussion ranges from international events like the Euro Cup to club football to test cricket to tennis and even horse races. The summer Olympics in Tokyo allowed them to bet on otherwise rarely considered events like table tennis and swimming.

“Sports betting is getting popular as the Nepali youths’ interest in international sports is increasing. So it would be best for the government to legalize local bookmaking companies,” Durgesh says. “That way, the government can earn revenue while all the money remains in Nepal.”

Senior economist and Nepal Planning Commission Vice-Chairman Biswo Poudel agrees that if sports betting is ever legalized, the whole system should be within Nepal. “By default, sports betting is designed in a way that the house always wins,” says Poudel. “So the ultimate beneficiary from the gambling channel should be based in Nepal.”

But Poudel also warns of the risks of legalization. Gambling is culturally considered a “sin” in Nepal, Poudel explains, and there is only a small segment of the population that understands the risks involved. And in any economy, if the number of risk-takers increases, the poverty rate will rise relatively. Also, adds Poudel, maintaining best practices in gambling channels in terms of information flow and reliability is difficult. He thus feels that the ban on gambling is justified and should be sustained.

Tiwari and Agrawal—both of whom consider themselves victims of gambling—agree that the ban should remain. “If the government wants to legalize gambling, let it open local casinos for Nepalis first,” Agrawal says. “But these betting sites should be banned the same way porn sites are.”

“The gambling market opens 24/7 and it can be very addictive,” Tiwari adds. Tiwari had started betting smaller amounts on things such as the number of corners in a football match and the number of runs by a cricket team . “I also found out that there’s a lot of match-fixing, especially in basketball and volleyball,” Tiwari adds. “Thus, no one should be allowed to gamble. Easy money makes people greedy.” 

Fightback begins

Phanindra Mani Pokharel, joint secretary and spokesperson at the Ministry of Home Affairs, says betting cannot be legalized under any condition. Pokharel informs that the police are maintaining strict vigil and apprehending anyone involved in illegal sports betting.

“We have also found that most of those into sports betting are technologically savvy,” Pokharel adds. “There’s not much we can do unless we get specific complaints or information.” Yet, as Pokharel suggests, most digital transactions that leave no evidence have left the regulators helpless.

Still, police have been cracking down on gambling based on whatever information they are getting. The latest crackdown came on July 7 when the Metropolitan Crime Division arrested eight individuals, including three Indian nationals, for organizing illegal betting rackets in Nepal. Over Rs. 3.4 million was seized from them. 

On May 25, police had arrested 11 individuals—six of them Indian nationals—in Kathmandu for betting during the Indian Premier League 2020.

A major arrest dates back to May 2018 when the Metropolitan Police Range Office, Kathmandu nabbed six people including former national footballer Anjan KC for running an IPL betting racket. According to the police, by the time they were arrested, the betting group had carried out transactions worth Rs 700 million during that IPL season.

ApEx had also reported in April 2021 about the gambling nexus in eastern Nepal, based in Biratnagar. Athar Ansari, considered one of the biggest bookmakers in the region, had begun operations as soon as the IPL started on April 9. Ansari, using his gang of a dozen or so bookies, has allegedly made millions of rupees over the past decade, with his financial connections being traced to India and even Dubai. Ansari and his associates are on the run after they were found to be involved in a kidnapping.

According to Statista, a company specializing in market and consumer data, the US sports betting industry is growing apace. The legal sports betting revenue is forecast to reach $2.5 billion by 2021-end, and by 2025, grow to $8 billion. In a recent report published in The European Business Review, Gross gambling revenue (GGR) in Europe, including online lottery, online casinos, and sports betting, was worth 24.7 billion Euros in 2020. The region’s online gambling market is expected to reach $94 billion by 2024.

Such hard numbers are hard to find for Nepal that outlaws every kind of gambling, including sports betting. Still, such betting is evidently on the rise. By sports betting, we do not mean casual wagers between friends and families. ApEx has found many Nepalis who have become professional gamblers by using local bookmakers and online betting websites. So how big is the illegal Nepali sports betting market?

“How can we have data of something that’s illegal and completely under the radar?” replies Narayan Prasad Pokhrel, Deputy spokesperson and information officer at Nepal Rastra Bank, the country’s monetary regulator. “We are aware that some people are using local wallets and financial channels to circulate sports betting money and we are working to find the culprits.” As for cryptocurrency trading, all Pokhrel has to say is that it is an illegal activity that NRB strictly discourages.

Spokesperson for Nepal Police Basanta Bahadur Kunwar says the police too have no clue. “If it were regular gambling like playing cards or rolling dice, I could give you exact figures based on arrests made, but even estimating the volume of online gambling transactions is difficult,” Kunwar says.

ApEx talked to over a dozen or gamblers betting on international sporting events, including the Tokyo Olympics. One had lost Rs 100,000 in a year, while another had parted with Rs 40 million in under three years.

In the recent Euro Cup, we found people who bet as low as Rs 100 on a one-off match to someone who bet Rs 10,000 on every single match. Some occasional betters wagered as high as Rs 500,000 on a single match. According to our back-of-the-envelope calculation, around 3,000 people could have betted in the tournament, for a total haul of Rs 30 million. The annual Indian Premier League, say those in the know, is an even bigger draw for betters, with at least 20 times that sum put up for wager every year. Anecdotal evidence suggests the trend is on the up, and it could get a lot worse if left unchecked.

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Ever had one of those journeys when you’ve planned everything perfectly but still end up being miserable? You’re going to an amazing destination, you have a safe ride to take you, your travel companions are the best you can get and you have everything to make you comfortable. But then something goes wrong mid-way and you have no idea what it is. But it still affects you and your travel is ruined.

This is what happens to Netflix’s freshly released “Mimi.” The Hindi-language film has an amazing cast, a decent production budget and an intriguing subject. But it fails to capitalize on its strengths and goes awry in storytelling.

Written and directed by Laxman Utekar, the drama initially disguises itself as a retrospective on commercial surrogacy. It is thus cleverly placed in 2013, around six years before India’s Surrogacy (Regulation) Bill came into effect, to give the audience a glimpse of what surrogate pregnancy looked like for India’s poor who were doing it for money.

An American couple—John (Aidan Whytock) and Summer (Evelyn Edwards)—have failed to conceive naturally and are searching for a surrogate mother in Rajasthan, India. They are looking for a “young and healthy female” to bear their child when they come across Mimi (Kriti Sanon), a local dancer. Bhanu (Pankaj Tripathi), their taxi driver and guide, then takes on the difficult task of convincing Mimi to become a surrogate mother for the American couple. With dreams of becoming a Bollywood actor but no means of getting there because of her humble background, Mimi takes up the offer for INRs 2 million.

The couple then leaves for the US and Mimi, lying to her parents—Mansingh (Manoj Pahwa) and Shobha Rathore (Supriya Pathak)—that she has a shoot for nine months, goes to live in her friend’s house. All is going well for the parties involved when at almost the end of the nine months a routine checkup reveals the child Mimi is bearing might have Down Syndrome. This scares the American parents who refuse to own up the child and run away, leaving Mimi to her fate. Now Mimi not only has to decide on the fate of the unborn child but also face her unassuming family and a conservative society. What she chooses to do and the effects of her decisions form the rest of the movie.

The tragedy with Mimi is, despite having a strong subject like pregnancy and motherhood as its central theme, it never connects its audience to the characters emphatically. Albeit using up around 2hrs 12mins of screen time, the film treats all the conflicts and confrontations it raises only superficially. Everything is happening too easily. The sense of acceptance of all situations by everyone makes it unrealistically altruistic, thus never invoking much emotion in the audience. 

Humor and comic timing of the actors make Mimi an enjoyable affair nonetheless. Where the writer/s have failed to address the gravity of certain situations, they have at other times inserted some really witty dialogues and situations that in turn are performed well—especially by lead actors Sanon and Tripathi. Sanon, as Mimi—the center of attention—has a coming-of-age story to tell and the actor does manage to deliver one of her best performances. And Tripathi, with the legacy he has built over the past few years, does what he is expected to—manifest a character that blends into the story and setting so well that you forget you’ve seen him as an entirely different person in the past. We wish Mimi’s family—the parents played by the talented Pahwa and Pathak—had got a more defining role. Had their characters been written a bit stronger, their presence would have added more value to the film.

Who should watch it?

Even with all its flaws in storytelling, the acting and elements of writing/filmmaking in Mimi make it worth a watch for any OTT viewer who is into comedy, drama, and family films. But if you’re someone who looks for strong social messaging and life-changing ideas, you might want to take a pass on this one.

Rating: 2.5 stars
Genre: Comedy, drama
Actors: Kriti Sanon, Pankaj Tripathi
Director: Laxman Utekar
Run time: 2hrs 12mins

While most businesses in Nepal suffered heavy losses during the Covid-19 pandemic, digital wallets were booming. Given the restrictions on people’s movement and the necessity of maintaining social distance, people in urban areas cottoned on to online banking and digital wallets for their convenience.

Media reports suggest the number of digital wallet users in Nepal has crossed 7.6 million, an over 30 percent increase since 2019-end. Also, the number of registered wallets have increased to almost two dozen, although not all of them are operational at the moment. Still, for a small economy, the existing wallets, along with commercial banks also providing wallet services, only adds to the competition. In a market with relatively few users and comparatively many players, the competition is tough for wallet service providers and unless their services do not have strong unique selling points, they will soon go kaput.

“We are fighting for that 5-7 percent of people in Nepal who are using digital wallets,” says Diwakar Pandey, Chairman of Digipay Pvt. Ltd. “Not all registered users are active so the market is still smaller. So if we can’t be unique, we won’t survive.” Registered in 2018 and approved by the Nepal Rastra Bank to provide monetary services in April 2021, Digipay is a fast-growing digital wallet that is looking to break norms to attract users to its platform.

For digital wallets to work, users/customers and vendors need to be part of the same service. For example, if Mr. X is registered to Wallet Y, he can only avail of the services provided by the vendors registered with the wallet. To pay for a product or service with the wallet, Mr. X will have to load the wallet from his bank account. Wallet Y ties up with as many vendors as possible to give customers like Mr. X discounts, rebates, cashbacks, bonus points, and even lucky draw prizes to attract them towards its service.

“With Digipay, the model is different,” says Pandey. “We believe cash is still king in Nepal and will be for at least a few more years. Thus, we give our users the option to use cash and still benefit from registering with our services.” There are still many Nepali smartphone users who are not used to using internet services every time they shop, and the same also goes for vendors.

The hassle of logging in to a wallet, loading it with digital cash, making a payment, remembering password—the whole process is a hassle to many, Diwakar explains.

So Digipay offers a whole new process for its users. Under Digipay’s service, once the users register with the wallet, they can even make cash payments to its 450 vendors inside Kathmandu valley and still get loyalty points which they can redeem in the form of Digipay’s ‘gold cash.’ When they have enough ‘gold cash,’ the users can use it to purchase products or services within the network. “The amount of gold cash received by the customers depends on how much each vendor is giving out but generally, Digipay users get back around two percent in loyalty points of what they spend within our network.”

Limited at present to Kathmandu valley, Digipay has crossed 100,000 registered users and is planning to expand all over Nepal. With Pandey’s previous experience in technology as well as event management, Digipay’s marketing and brand activation are events-based. Having been associated with many physical events before the covid era, Digipay has currently been reaching its customers through online events.

Currently, Digipay is sponsoring an online talent show called “T-Series StageWorks Talent Hunt” with the tagline ‘Ticket to Bollywood.’ In this unique event, the contestants participate through online videos and the winner gets scholarships at T-Series StageWorks Academy in India, run by the Indian entertainment giants T-Series.

This week, I wanted to watch a Nepali movie. To be honest, I kind of started missing the good old days when I’d go to the multiplex halls every week, popcorn in hand, parking coupon in the pocket, and try to enjoy whatever was presented on screen by Nepali filmmakers. I tried to relive the experience, although at home, streaming on a 43” inch screen on YouTube. Now the thing about YouTube or an OTT platform is, it gives you immense choice on what to watch as well as the option of skipping through boring parts. You can watch a 1hr 30-minute feature film in 15 minutes and still understand what’s going on.

I did the same this week. Not because I was in a hurry, but because some recent (pre-2020) movies I watched on YouTube did not deserve more than 10 minutes of attention, including a couple by Nepal’s highest-paid ‘film star’. Disappointed, I also began fearing for the future of the Nepali film industry. I cannot speak for all, but I am pretty sure a lot of multiplex audiences like me have been spoiled by OTTs where we can seamlessly watch movies from around the world on their personal screens and for a fraction of the price we spent in theaters. If the Nepali film industry does not step up its game, it’s going to collapse in a few years, I thought, while watching the opening credits of the 2019-film “Gopi.”

Written and directed by film journalist-turned-filmmaker Dipendra Lama, “Gopi” is a perfect example of the route Nepal could take to the OTT platform. It is a film that represents a part of Nepali society and projects it on screen without superficial distortions. Lama, who is known to stylistically stay closer to the real world than most Nepali filmmakers, directs the extremely talented Bipin Karki in the lead role of Sudhir aka Gopi. The actor-director duo tells the story of a common man who has been invisible in Nepali cinema for so many years.

Sudhir (Karki) is a college lecturer and a cattle farmer. So passionate is he about raising cows, he is even ready to give up even his girlfriend Sujata (Surakshya Panta) if forced into a choice. As it is, his relationship with his father (Prakash Ghimire) is stressful. The father wants him to apply for a US Green Card; Sudhir does not want to leave the country. Sudhir is like some of our youths who are determined to do something worthwhile in their homeland, and his father represents the many parents who’d spend millions of rupees to send their children abroad rather than support their trades or professions in the country itself.

As any common man would do, Sudhir struggles. A passionate farmer who loves cows, Sudhir has to fight through many difficulties to survive. His personal relationships are strained because of his choice of work, and this country, he finds, although it is still deemed an agricultural nation, is no country for poor farmers!

Sudhir’s story is so organic that had it not been for the background score and the multi-angle shots, it would seem like a documentary. But that’s also a setback for the film. In the pursuit of genuineness, imagination takes a backseat and thus the tempo suffers. Throughout its 2hr run-time, the film maintains a constant pace and never does anything more than portray Sudhir’s life as it is. The film’s inability to heighten conflicts at times, and a somewhat lazy climax, do not allow the film to maximize its true potential. Nonetheless, I’d watch Gopi half-a-dozen times than see the highest-paid Nepali actor disappoint with every expression. 

Who should watch it?

Gopi is a family film and if you scroll through its comment section on OSR Digital’s official YouTube channel, you’ll notice many youths, especially those who have been forced to migrate abroad for work, identify with it closely. Still, this family entertainer is meant for people from all walks of lives and we highly recommend Gopi to all Nepali audiences as a preview of what Nepali movies on OTT might look like.  

Rating 3
GOPI
Drama
Director: Dipendra Lama
Cast: Bipin Karki, Barsha Raut, Surakshya Pant
Time: 2hrs 2mins 

Nepal’s monetary policy for the fiscal year 2078/2079 (2021/2021), which the Nepal Rastra Bank (NRB) was scheduled to present on July 18, got postponed for political reasons. Already late by a week, Nepali banking fraternity awaits the policy with anticipation, especially as a new government takes over.

Sunny Mahat of ApEx talks to Bhuvan Dahal, CEO of Sanima Bank and President of Nepal Banker’s Association, about his expectations from the monetary policy and the current liquidity situation. 

What have been the biggest shortcomings of past monetary policies?

In the past, the main problem has been with meeting set targets. The targets for GDP growth and capital expenditure are rarely met. Also, inflation has never been under control. Our inflation rate is calculated based on money supply and the cost side is ignored. That’s where we fail, I think. 

But this last fiscal year saw some success. Inflation was targeted to grow at no more than seven percent and looking at the report of the past 11 months, it is only at around 3.5 percent. 

What are your expectations from the soon-to-be-announced monetary policy now that we have a new government?

I don’t think a change in government will make a fundamental difference as we are in a multi-party democracy. We have high expectations from the current governor Maha Prasad Adhikari though. He is a highly qualified, experienced banker who has already proven his mettle.

If you see reports from the last fiscal, he has met almost all targets he set in the monetary policy. Inflation is under control. Also, the minimum credit growth target of 20 percent was easily surpassed with 28 percent growth. Rastra Bank wanted to keep foreign exchange reserve of no less than seven months; we have 10 months of reserve right now. We had enough liquidity in the last fiscal, which has also brought down our lending rates. Also, interest recovery has been at around 90 percent for the banks despite the pandemic.

Going forward, we hope the liquidity situation remains the same and banks have enough funds to utilize. For this fiscal, we have suggested NRB to use the Rs 300 billion surplus as well as the remaining Rs 70 billion set apart for refinancing. We should let the sectors still under stress refinance and restructure their loans this fiscal too. Right now, commercial banks are only able to use 50 percent of the deposits made by local bodies. We request for 100 percent use to increase liquidity in the system and further decrease lending rates.

Also, we have suggested the NRB to allow inter-bank lending so that banks with both surplus or deficit liquidity can manage their finances accordingly. The NRB should also help us in promoting digital currency by giving us subsidies for inter-bank money transfers so that it becomes free of cost for end customers. If internet costs are brought down and we have enough digital literacy campaigns, we will be able to reduce the logistical costs behind paper currencies as well as create efficiency and transparency in the system. 

It is being reported in the media that ‘monsoon development’ has led to an overflow of liquidity in Nepali banks. If true, could this be counterproductive for the economy?

It is partially ‘monsoon development’ but this has more to do with the Nepali way of expenditure management. Most government as well as private organizations have this habit of making major payments at year-end. Government agencies wait for Asadh (June/July) to finish their budget. So this results in liquidity overflow in the banking system at the end of the fiscal. This year, we saw a total deposit of Rs 700 billion, out of which Rs 200 billion were made in Asadh only.

But as this is a recurring phenomenon, the banks are already prepared. We pre-plan where to spend the deposits. It is indeed counterproductive when there is a sudden cash flow or a sudden drought of money in the system. To counter this, the government has to create a system where budgets are released and bills are paid monthly or at least on short periodical basis. 

What do Nepali banks feel about the current surge in stock market investments? Have ‘share loans’ increased too? Could this create more volatility in the banks’ debt ratios?

Share loans have increased by almost 100 percent increase this year. The banks only lend 70 percent of the total value and keep the rest 30 percent as margin. Also, the liability for a debtor goes beyond the share value and the total exposure of share loans for commercial banks is only about 2.4 percent. That makes banks safe from any volatility in the share market.