Kathmandu, March 20:

Nepal ranks at the bottom 121st position on the Corruption Perception Index (CPI) 2008 published by Transparency International.

Nepal scored 2.7 in 2008, slightly above than in 2007 when it had scored 2.5. Countries scoring below three are said to be in rampant corruption.

“To improve Nepal’s grading and atleast score above three is our goal,” said CIAA acting chief commissioner Lalit Bahadur Limbu during an interaction between the financial institutions and Commission for Investigation of Abuse of Authority (CIAA) here today.

To improve the score the private sector must be brought into the net of CIAA, he said adding that to improve Nepal’s grading the private sector — especially financial institutions — must be more transparent and self-regulated. “However, a highly developed country like the US also failed in maintaining financial discipline — which brought about the recent global crisis — so how can Nepali financial institutions self-regulate?” said central bank governor Dipendra Bahadur Chhetri. “The global financial crisis is the result of failure of self-regulation in US financial institutions,” he said adding that Nepali financial institutions should be more vigilant. “One of the measures could be maintaining a Code of Conduct,” he said.

“To self-regulate, please maintain a Code of Conduct,” CIAA acting chief commissioner Limbu also said. The anti-corruption body organised the interaction to inform financial institutions on the Bill — that is going to be passed by the parliament in the next session — to give more teeth to the CIAA to act against private financial institutions also.

“There are lots of complaints against private banks also and the private sector will also be brought into the net of the CIAA after the Bill is passed,” he said.

“The financial institutions — custodians of public deposit — should be more self-regulated,” Bed Prasad Siwakoti, commissioner at the CIAA said hailing the bankers’ efforts at self- regulation. On the occasion, the bankers informed of their institutions’ Code of Conduct and initiatives of Nepal Bankers’ Association (NBA).

The banking sector is considered one of the most transparent sectors in Nepal, though it has still to pass a lot of tests.

Nepal Rastra Bank (NRB) took Nepal Bangladesh Bank (NBB) under its control to safeguard the public deposit. It is one of the best examples of how lack of self-regulatory mechanism hurts a financial institution and puts public’s money in danger.