Vol 2, Issue 20 WEEKLY 26 July 2012 NICCI e-Newsflash NICCI e-Newsflash Inside this issue: Pranab Mukherjee is India’s 13th President Content Pg Veteran Congress NRB unveiled monetary policy for 012-13 2 leader Pranab Investment Board looking for experts to 3 Mukherjee, who is advise on hydro projects often portrayed as a ‘Nepal-expert’ in Butwal-Gorakhpur cross-border transmis- 3 New Delhi, has sion line : Government takes initiative been elected In- Soil test complete for metro rail in Ktm 4 dia’s 13th Presi- SAARC commerce secys agree to expedite 4 dent. IOC proposes to construct petro pipeline 5 The candidate Loan on 10 percent Interest to additional 5 from India’s gov- 16 Hydro Power Projects erning Congress party, former Fi- Revenue collection crosses Rs 244b 6 nance Minister Nepal-Bangladesh trade talks -Stage set 7 Pranab Mukherjee, BB Airways to start direct flight to Tokyo 7 was declared win- from October ner Sunday, 22nd Over 5,000 left for South Korea for EPS 7 July, in voting for India’s president, a Korea renews EPS for another two years His Excellency President of India 8 largely ceremonial Departure of women migrant workers up 8 position. Shri Pranab Mukherjee IATA says travel agents should pay air- 9 lines weekly Election official P.K. Agni- hotri said Mukherjee, 76, Average Length of stay increased 9 Nepal-India Chamber of Commerce & Industry, had received more than on behalf of the Business Community of Nepal Sixth agriculture census- CBS for more 10 twice as many votes as comprehensive statistics extends hearty congratulations to His Excellency his rival in last Thurs- NRB relaxed FIs one more year to main- 11 day’s balloting by na- Shri Pranab Mukherjee on being elected to the tain interest fetching call account tional and state legisla- President of the Republic of India and best wishes tors. for further prosperity of India as well as further Star rating for agro products on cards 11 augmentation of fruitful bilateral relationship Exporters demanded easy access to refi- 12 “I express deep gratitude nanced loan between Nepal and India, during his tenure. to the people for electing Industries seek raft of incentives in pro- 12 me to this high office,” posed industrial enterprise act Mukherjee said. He said he would try to sworn in on Wednesday, 25th July. justify the people’s trust. New NEPSE Listing Bylaws 13 Mukherjee has served previously as UTL launches GSM mobile service 14 His rival, Purno Agitok Sangma, con- ceded defeat before the counting was foreign minister, defense minister and Aditya Birla sweetens Northern Iron offer 14 complete Sunday. “I congratulate Muk- finance minister. His latest term was to $532 mn herjee on his victory and I wish him suc- as finance minister from 2009 until earlier this year. Microsoft: Windows 8 will go on sale Oct. 14 cess,” he told reporters. Microsoft logs in first quarterly loss in 26 15 Mukherjee and Sangma, a former His personal relationship with Nepali speaker of Parliament, were competing leaders had, to a large extent, helped Euro not in danger: European Central 15 to succeed India’s first female president, discussions on bilateral concerns in a candid way. Lenovo CEO shares his US$3 million bonus 16 Pratibha Devisingh Patil. He joined the office as 13th President of India after NICCI e-Newsflash NRB unveiled monetary policy for the fiscal year 2012-13 - aims to ensure financial stability Nepal Rastra Bank (NRB) on cent and 3 percent respectively of their Wednesday, 25th July unveiled total loan portfolio. “It is the continua- the monetary policy for the tion of last year’s policy of gradually fiscal year 2012-13. The policy increasing the limit to 5 percent,” said has laid high emphasis on in- Khatiwada. creasing lending in the produc- tive sector, financial inclusion To meet its objective of increasing ac- and healthy financial system. It cess to finance, the central bank has has also liberalised foreign increased the limit of collateral free exchange-related provisions. loans that a group can take from BFIs to However, the policy hardly Rs 100,000 for each member. They can speaks of real estate and share get up to Rs 300,000 by putting collat- market. eral too. Unveiling the policy, NRB Gov- Besides making mergers more effective, ernor Yuaraj Khatiwada said the central bank also said it will make the policy concentrates on ensuring financial stability, ex- efforts to introduce policies on acquisition. panding access to finance, helping achieve economic growth of 5.5 percent and controlling inflation. As the Nepali banking system has an abundance of liquidity and foreign exchange reserve, the NRB has opened doors for In order to expand credits to the pro- commercial banks to invest up to 30 ductive sector, the policy has reduced TARGETS OF MONETARY POLICY percent of their deposits in foreign interest rates of refinancing it pro- 2012/13 banks, in call deposits, certificate of de- vides to banks and financial institu- posits and other instruments with low tions (BFIs) to 6 percent from the risks for two years. “As the Nepali finan- current 6.5 percent in the agriculture GDP Growth: 5.5% cial system is also becoming part of a and hydropower and 7 percent in global financial hub, we have been flexi- other productive sectors. “In turn, the Inflation: 7.5% ble in this regard,” said the governor. BFIs will have to re-lend the amount at not more than 9 percent,” the pol- The NRB has further removed the maxi- icy says. BFI´s deposit growth: mum limit of foreign exchange availabil- 15.1% (to Rs 1,160b) ity against a passport for a year, while The central bank has also made a allowing people to get up to $2,500 at a provision whereby BFIs must main- Domestic credit growth: 16% time. “It means a passport holder can get tain a ‘base rate’ of interest by using up to $2500 at a time, irrespective of the the method fixed by the central bank. frequency of travel,” said a senior NRB The BFIs will have to determine their Forex reserve: official. People travelling abroad for vari- interest rates on the basis of the base Enough to finance at least 8 months ous purposes such as medical and other rate. This is expected to reduce the purposes will get up to $10,000 from the interest rate gap between deposit and credit. BFIs will have existing provision of $6,000. to publish such base rates on a regular basis, the policy says. Those importing goods from third countries other than India through draft/TT will get up to $30,000 at a time, up from the Khatiwada said the move has been taken to make the inter- $25,000 earlier, according to the new monetary policy. est rate transparent and competitive. Although the much expected interest rate corridor was not introduced imme- Nepalis having foreign currency deposits will now be able to diately, the central bank said it will implement the system utilize up to $5,000 from their accounts in foreign currency gradually. without going to the central bank for approval. “The move was taken to attract more people to open foreign currency deposit The central bank has also increased the deprived sector accounts,” said Khatiwada. lending for BFIs. Now, commercial banks, development banks and finance companies must lend 4 percent, 3.5 per- Page 2 Vol 2, Issue 20 Investment Board looking for experts to advise on hydro projects The Investment Board (IB) has begun scouting for national and This panel will also help to improve the projects and pro- international experts to be able to better negotiate and monitor vide an example of how international experts work on pro- the five hydro projects that it has been assigned to look after. ject negotiations and project development. “The overall idea The five projects the government has given to the IB to handle behind having this panel is transferring knowledge from the are West Seti, Upper Karnali, Upper Marsyangdi, Arun III and global level to the local level, said the IB. Tama Koshi III. According to the IB, the process of forming these three pan- IB sources said it would be forming three panels—an interna- els and selecting experts have started and donor agencies tional expert panel, an international technical expert panel and a have been asked for financial support. “As we cannot pay the domestic expert panel. experts on our own, we have to rely on international do- nors,” said Pant. According to the IB, the expert groups will According to the IB, the international expert panel will help dur- begin work by the end of August. ing negotiations for the 750 MW West Seti project. “Since it’s a mega budget project, a small error may cause a massive loss to The IB said it would start work on the five hydel projects the country,” said Radesh Pant, chief executive officer of the IB. and begin negotiations with China Three Gorges Corpora- “The panel is necessary to ensure maximum benefits during the tion (CTGC) for West Seti once these three panels are negotiation process.” The expert team will consists of lawyers, formed. Meanwhile, the IB has sent the template of the pro- top engineers, economists, sociologists and project finance spe- ject development agreement (PDA) for the other four pro- cialists, among others. jects to the respective investors. “Globally, an international expert team is basically hired during The IB said it had been discussing ways to make West Seti a negotiations for large projects.