KATHMANDU: Economic Digest, a daily morning email digest, is basically a relatable summation of important business news from Nepal into easy-to-understand summaries.

NRB to facilitate for big merger of BFIs

Nepal Rastra Bank (NRB) has announced its policy to further facilitate the banks and financial institutions (BFIs) for their acquisition and merger.

Issuing a new directive, the central bank has prioritized the concept of acquisition and merger of big banks and financial institutions meant for fiscal stability.

In the case of the merger of ‘A’ class bank, the central bank has adopted a flexible policy in regard to the age of the Chief Executive Officer (CEO).

As per the current provision, a banker should not exceed the age of 65 years to lead the bank as the CEO. If the ‘A’ banks were merged together, there will be no age limit for the CEO.

The provision of age limit for the CEO will not be applicable for a single tenure after the beginning of the integrated transactions in case the banks were merged till the last day of the fiscal year 2077/078 BS.

Likewise, the central bank has decided to exempt 0.50 percent in the cash deposit to be kept compulsorily after the banks’ merger and acquisition until the end of the FY 2078/079.

Also, the central bank has opted for the policy of the ‘forced merger’ of the BFIs with the cross-holding in investment.

201 local units yet to unveil budget 2020/21

As many as 201 local governments have not unveiled the budget for the fiscal year 2020/21 even 12 days after the implementation of the federal budget.

According to the latest data released by the Ministry of Federal Affairs and General Administration, only 552 local units have submitted the budget as of Sunday.

The data is based on the details entered by the concerned local units through the ministry’s portal, the ministry said.

The total percentage of local units who could not bring budget stands at 26.69 %. According to the ministry, 91 percent of the local units in Province 5 have already unveiled the budget.

Now only nine percent of the budget is left to come at the local level in the province. However, in Province 2, more than half of the local governments have not been able to bring the budget.

Province 2 has a total of 136 local units. Out of them, only 58 local governments unveiled the budget.

According to the Intergovernmental Finance Management Act 2074, the local government should bring the budget by June 24. The budget should be passed by mid-July.

Investment modality for Bheri-Babai Diversion Multipurpose Project decided

The Ministry of Energy, Water Resources and Irrigation has decided the investment modality for the Bheri-Babai Diversion Multipurpose Project (BBDMP).

The inter-basin water transfer project which aims to provide year-round irrigation facility to as much as 51,000 hectares of agricultural land in Banke and Bardiya districts would be invested and operated in company modality under the ‘Nepal’s Water, People’s Investment’ scheme.

The project with revised cost worth over Rs 33 billion is expected to generate 46.8 megawatt of electricity and fetch altogether over Rs 6 billion of annual income from both agriculture and electricity.

The stipulated deadline for the project is fiscal year 2022/23.

The trade deficit of Nepal decreased by 16.71% in last fiscal year

Nepal’s trade deficit experienced drop by 16.71% to Rs 1.1 trillion with a fall of a double digit percent point in import expenses.

According to the Department of Customs (DoC), Nepal paid a total import bill of Rs 1.19 trillion, a decline of 15.63% in 2019/20.

According to the officials of the Ministry of Industry, Commerce and Supplies, imports fell by a notable amount after the government imposed import restriction measures along with the lockdown and coronavirus that grappled the country for almost four months on the year end.

The country’s imports and exports ratio has come down to 12.45 from 14.61 in the previous fiscal year which defines Nepal imported goods worth Rs 12.45 for every export earning of Re 1 in 2019/20.

(Compiled and prepared by Nitish Lal Shrestha)

Nepal Economic Digest is a daily morning email digest, basically relatable summations of the most important business news, happenings from Nepal into easy-to-understand summaries.