Nepal | September 22, 2019

Govt scraps licence of 303 manpower firms

Himalayan News Service

Kathmandu, September 4

The Department of Foreign Employment today scrapped the licence of 303 manpower agencies as they were unable to deposit the bank guarantee to the government as mandated in the recently amended Foreign Employment Act.

Bhisma Kumar Bhusal, director general of DoFE, informed that a total of 848 firms have deposited the bank and cash guarantee to run their business.

“We are verifying the final number of companies that are now eligible to process the works for foreign employment and the final tally will be ready by Thursday.”

After the government amended the Foreign Employment Act to encourage manpower firms to go for mergers, 303 manpower firms applied for the merger
process and have been transformed into 131 firms.

Bhusal further informed that six firms had applied to merge into one company. Similarly, there were two sets of five companies each that applied to merge into two firms. Likewise, nine groups of four companies each have converted to form nine agencies. Meanwhile, 13 sets of three agencies each have merged to form 13 companies and 106 groups of two firms each have formed 106 agencies.

As per DoFE, there were altogether 1,527 firms in existence till last year. Among them, the licence of 204 firms were scrapped. Till August 18 this year there were only 1,323 firms in existence.

According to DoFE, as mandated in the amended act the guarantee money to operate a recruiting agency has been increased to up to Rs 60 million, a 20-fold increase from the previous amount and manpower agencies had been rushing to deposit their bank guarantee as they would be forced to close down their business if they failed to do so.

Earlier, recruiting firms had been paying Rs three million guarantee money — Rs 700,000 as cash deposit and Rs 2.3 million as bank guarantee to run their business.
The DoFE had given September 4 (today) as the final deadline to submit bank guarantee for the manpower firms.

As per the new law, manpower firms sending up to 3,000 workers per year must deposit Rs five million and submit Rs 15 million as bank guarantee. Likewise, manpower agencies sending between 3,000 and 5,000 workers must deposit Rs 10 million and submit Rs 30 million in bank guarantee.

Those who supply over 5,000 workers per year must deposit Rs 20 million and provide a bank guarantee of Rs 40 million to start operation.


A version of this article appears in print on September 05, 2019 of The Himalayan Times.


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