Nepal Telecom (NT) has paid Rs 2.5 billion, the first instalment of licence renewal fee, to the government. The NT board, about two weeks ago, had decided to pay the renewal fee in eight instalments as prescribed by the government. The board had decided to pay the first instalment after Ncell, the private sector mobile service provider, paid the same amount of money in the first instalment on December 21 last year. As per the conditions required to operate the GSM mobile service, the state-owned company has to pay the government Rs 20.13 billion for renewing its licence.

“We paid the first instalment on Tuesday,” said Guna Kesari Pradhan, NT spokesperson. She said the Telecom would be clearing the dues annually in the remaining seven instalments. Of the total, NT now owes the government around Rs 18 billion in renewal fee for operating the GSM mobile service for 10 years (1999-2009).

NT had disbursed Rs 189 million four years ago when the Nepal Telecom munications Authority (NTA) renewed its licence “provisionally” under pressure from NT and its trade unions. Similarly, Ncell will have to pay remaining Rs 17.63 billion within the next seven years.

The NTA had directed both NT and Ncell to pay the renewal fee in instalments as per the provision set by the government. Based on the recommendation of Minister for Information and Communications Raj Kishor Yadav-led taskforce, the Financial and Infrastructure Committee of the Cabinet in September last year had decided to collect committed royalty and licence renewal fees from telecom operators on eight-year instalment basis. Following this decision, the Communications Ministry and the NTA had directed NT and Ncell to pay the renewal fee as the conditions require them to renew their operating licenses after 10 years. NT’s licence for the first 10 years had expired in 2009 and Ncell’s is expiring in 2014.

An official at the NTA said though it was late, the telecommunications authority was successful in collecting renewal fee partially from NT who was supposed to pay all Rs 20.13 billion four years ago. “Earlier, NT and Ncell had been pointing fingers at each other to pay the fee first,” said the official.

The instalment provision had made it easier for another operator United Telecom Limited (UTL) too for clearing the dues to the government. Immediately after the Cabinet decision, it had paid the first instalment of the committed royalty of Rs 204.18 million to get its licence renewed. According to the NTA, with the payment of the first instalment, UTL now has to pay the committed royalty dues of Rs 1.42 billion.

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 Trade unions at the Nepal Electricity Authority have announced a four-week protest against the January 3 government decision to upgrade the capacity of Upper Trishuli 3A. All five trade unions said the government had made the ‘illegal’ decision with the intention of causing to the power monopoly losses worth billions.

Organising a press conference, the unions said the decision decreases the NEA’s income in proportion to investment and results in losses

of millions of units of electricity by delaying power generation by three years.

The unions have repeatedly said the China Gezhouba

Group Company Limited tasked with developing the power

project had pressed for the decision and it was not in the interest of the NEA. They had also submitted a memorandum to Prime Minister Baburam Bhattarai asking him not to go for project upgradation.

At a press meet, the unions said they plan to expose the racket involved in the capacity upgradation in the coming week. As part of their protest, NEA employees will wear black arm bands and launch a signature campaign against the upgradation, the unions informed. The staff will also stage a one-hour pendown in the third week at the NEA headquarters office in Ratnapark. And in the fourth week, the unions will resort to a strike in NEA offices across the country for two hours save in power houses, substations, counters, no light and emergency services. The employees have threatened to disrupt NEA’s services if the government does not roll back the decision even after a month.

The government had award the project on EPC (Engineering, Procurement and Constructing) model to the Chinese company in 2010 through

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KATHMANDU: Nepal Tourism Board (NTB), along with five travel trade companies promoted Pashupatinath and Muktinath at the Travel and Trade Fair in Chennai, India, on January 4-6. Visited by more than 10,000 people, 1,000 travel trade companies and 150 media representatives, the fair provided a good platform for Nepal to promote Pashupatinath and Muktinath temples along with other leisure destinations and activities keeping in view the upcoming summer holidays in Tamil Nadu in particular and south India in general. — HNS

Nepali shoe house

KATHMANDU: Local footwear manufactures that had teamed up and launched a showroom showcasing Nepali branded shoes at Naach Ghar, Jamal has completed 100 days since opening its doors to customers on Monday. On the occasion, it is giving a discount of 10 per cent on the purchase of Nepali branded shoes. The companies that have teamed up to keep their products under a single roof include Shikhar, BF Dear Hill, Sky, Koseli, Cross Road, Leather Wings, Takura and Foot Land. The firms hope it will help them promote their latest offerings and the local leather industry as a whole. — HNS

Frame centre opens

KATHMANDU: CB Mount and Framing Center has officially started business operations from Buddhanagar, Kathmandu. The centre has started providing services including photo framing, garland framing, liquid lamination, and glossy and matte lamination, it said, adding that it has imported the latest technology for top quality framing. The newly opened centre will provide any kind of photo related solutions, it added. — HNS

Kalyan holds AGM

KATHMANDU: Kalyan Saving and Credit Co-operative hosted its 13th annual general meeting (AGM) under its chairman Lila Bahadur Gurung, with former energy minister Gokarna Bista and member of board of directors at National Co-operative Bank Ram Sharan Ghimire as chief guests. Speaking on the occasion, Gurung said the cooperative was able to collect share capital worth Rs 50.015 million, deposit worth Rs 420.41 million and floated loans worth Rs 390.50. It posted an operating profit of Rs 10.68 million and its business transactions excluding bad loans and other funds of Rs 50.95 million was at Rs 610.83 million during the last fiscal year, Gurung said. — HNS

Laos to join WTO

KATHMANDU: Laos informed the World Trade Organisation (WTO) that it has ratified its membership agreement. With Laos ratification of WTO, Laos will officially become the WTO’s 158th member on February 2, under the global trade regime procedures. The membership deal was approved by the WTO General Council on October 26. Laos’ chief negotiator industry and commerce minister Nam Viyaketh and WTO director-general Pascal Lamy signed the Protocol of Accession immediately afterwards, ending 15 years of negotiations. — HNS

Buddha Air expands

KATHMANDU: Buddha Air started a daily flight to Surkhet from Thursday. The company will increase the number of flights to the new destination if demand picks up in the coming days, it said, adding that it is the only domestic airline company to fly to Surkhet. Buddha has fixed the time for Kathmandu-Surkhet flight

at 1:45pm and Surkhet-Kathmandu flight at 3:10pm. The airline has fixed the price of a one-way flight at

Rs 9,190. Buddha Air is the only private domestic airline company to fly to both domestic and international

destinations. — HNS

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KATHMANDU: Fonepay will bring a mobile wallet from January 21.

“A mobile payment switching system, Fonepay will work as a wallet for customers, who will be able to transfer money or pay for their purchase,” said Biswas Dhakal, who is president of F1 Soft International that has powered Fonepay.

The wallet — a uniquely designed platform — will facilitate customers of any bank and also the unbanked customer to pay nationally from Nabil Bank, Sunrise Bank and Machhapuchchhre Bank initially, according to chief executive of Fonepay Asgar Ali. “Within three months, we will have more than half a dozen banks as members.”

“A customer of one bank can pay a merchant acquired by another bank, with ‘Fonepay’,” he said, adding a customer, who receives money directly in the mobile phone, can deposit it to a bank account, cash out using any associated agent network, or utilise that amount for acquiring any service associated with Fonepay like merchant payment, utility payment, person to person transfer or can store it in the wallet account.

Powered by F1 Soft International — one of the finalists for the 2012 Red Herring Top 100 Asia Award — Fonepay will also facilitate international remittance to transfer remitted amount directly to a mobile phone.

“The company is also planning to pay interest on the amount accumulated in the wallet account,” Ali said, adding Fonepay targets to serve in national and international money transfer services with low cost and efficient services that will help channel more remittance due to cost reduction. One has to register with Fonepay to avail the service, which is easy, he added.

Currently, Fonepay has 22 member banks.

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Laxmi Intercontinental — the sole authorised dealer of Hyundai four-wheelers in the country — launched the Hyundai Veloster coupe today.

Veloster is Hyundai’s brand-new entry-level sports car which features unique three door styling and high-tech communication systems including the seven-inch touch-screen display. Inspired by concept car design code named HND-3 styled at Hyundai’s Design and Technical Center at Namyang, South Korea, it was unveiled at the 2007 Seoul Motor Show.

The company invested $240.8 million in the car over a 40-month research and development period. The first impression when you look at this car is sleek, tough and sporty. Veloster combines design elements of a coupe and the functionality of a hatchback, while incorporating an additional passenger-side rear door for uncompromised rear-seat access.

The headlamps feature LEDs, projecting a bright, accurate beam focus onto the road ahead. A panoramic sunroof perfectly suits the energetic, active lifestyle of Veloster drivers, letting in plenty of light and fresh air.

A camera in the tailgate handle displays the view to the rear on the 7” LCD screen, to help with parking. Twin-barreled and tipped in chrome, this is sportiness at its most captivating.

The twin tip centre exhaust, stylishly shaped and built into the rear bumper, gives the Veloster an abundance of sporting character. And to add more, the unique 18” alloy wheel with painted inserts gives an aggressive presence on the road and provides personality and a custom touch. Despite its small size, highly-advanced 1.6L four-cylinder MPI Gamma D-CVVT engine generates 130 ps power @6300 rpm and comes with 6-speed automatic transmission.

With a dual airbag system as standard, the Veloster is fully equipped to protect its occupants in case of accidents. Combine this with passive safety measures that come into their own whenever the driving conditions demand, and reassurance is built in. Its showroom price is fixed at Rs 6,096,000 and is available in colours including white crystal, vitamin c, Veloster red, sunflower, sonic silver, sleek silver, phantom black, green apple, clean blue and blue ocean.

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The latest stress tests of commercial banks carried out by the Nepal Rastra Bank (NRB) have shown some improvement compared to previous year’s results, especially due to the improvement in liquidity and capital adequacy indicators.

This is what the International Monetary Fund’s (IMF) recent report based on the assessment of its article IV mission suggests. The IMF report says fewer banks are vulnerable to liquidity and credit shocks in 2012 compared to 2011.

Stress testing is a risk management tool used to evaluate the potential impact on a firm of a specific event and movement components like earning, liquidity and capital.

Citing the recent stress tests of commercial banks by the central bank, the IMF report said a standard credit shock would push the capital adequacy ratio of 20 among 32 commercial banks below the regulatory minimum. The number of such banks in 2011 was 22.

Standard credit shock has been defined as 15 percent performing loans deteriorating to substandard, 15 percent substandard loans deteriorating to doubtful, 25 percent doubtful loans deteriorating to loss and 5 percent of performing loans deteriorating to loss.

Likewise, the number of banks that may turn illiquid after five days of standard withdrawal shock is 14 in 2012 compared to 19 in 2011, according to the report. Standard withdrawal shock is the withdrawal of customer deposits by 2 percent and 5 percent in the first two days and 10 percent each in the following three consecutive days.

According to the report, commercial banks are more resilient to deposit withdrawal shocks, and to withdrawals by large individual and institutional depositors. It is mainly due to the improvement in liquidity on the back of strong remittance inflows, states the report.

Bankers say the report reflects the reality. NIC Bank CEO Sashin Joshi said the report shows the improvement is consistent with the measures taken by the central bank and the commercial banks to address credit and liquidity shocks. “Banks have increased their liquidity and capital adequacy ratio. I don’t think the banks will face major shock due to deterioration of asset quality and there will be a liquidity crisis like two years ago,” said Joshi.

According to Joshi, the central bank directive on managing an additional one percent capital in the capital adequacy ratio as buffer capital would also help absorb credit shocks. Currently, banks are required to maintain CAR at 10 percent and the central bank has directed them to keep an additional one percent as caution measure.

There is also a slight improvement in the response to credit shocks, particularly those calibrated to real estate loans, according to the report. In case of 25 percent of performing loans of real estate and housing sector is directly downgraded to loss loans, CAR of 11 commercial banks will come below the required 10 percent level.

The number of such banks in 2011 test was 15. The improvement is due to the decrease in banks’ loans to the realty sector over the last three years.

Commercial banks’ direct exposure to construction and real estate sectors has declined from 19.5 percent in 2009-2010 to around 16.5 percent in 2011-12. Indirect exposure through collaterals has also declined from 66 percent to 56 percent over the period. “The overall exposure is still high,” states the report.

Joshi, however, said with banks increasing provisioning of real estate loans, systemic risk is unlikely to happen even if the realty loans are defaulted.

The central bank also says the chances of BFIs’ exposure to realty sector affecting the system immediately are slim. “The lending to the realty sector has so far been managed well,” said NRB Deputy Governor Maha Prasad Adhikari. “A little more time is required for BFIs to be able to recover realty loans.”

He said the liquidity surplus is also unlikely to remain at last fiscal year’s level due to increased lending against deposits. “However, liquidity crisis like before looks unlikely.”

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