WB, NRB to initiate joint project

Kathmandu, August 26:

Officials of the World Bank (WB) today disclosed that they are initiating a ‘big project’ to make an overall survey of ‘financial resources availability’ across the country. “The project is going to be started soon, which will have three basic components; namely deposits, credit and payment system of the financial institutions,” informed Aurora Ferrari, private sector development specialist (Finance and Private Sector Development), World Bank-South Asia region.

Ferrari, the team leader of proposed project, said that the project would survey the situation of consumer’s ‘access to finance’ across the country in a joint collaboration with Nepal Rastra Bank (NRB), the central bank of the country. Talking to The Himalayan Times, Ferrari, the team leader, however, expressed ‘ignorance’ about Nepal and its current financial situation. “The project will take stock of the access to finance for the lower-class clients as well,” she explained. Sabin Shrestha, financial sector expert of the World Bank said the project would carry out nationwide survey on “whether consumers have access to financial services for their betterment or not.”

However, the districts to be surveyed are yet to be finalised, he said, adding that the internal and external experts would be hired for the project. The period of the proposed project is going to be less than a year, which will cost Nepal millions of rupees, that would be funded by the World bank and other donors also. The budget of the project is also yet to be finalised — whether it would be grant or loans — Shrestha said replying to a query at an informal meeting called by the World Bank at its office today. Despite the seriousness of the project and the huge money likely to be involved, Ken Ohashi, the country director of World Bank was not present at the meeting. According to tentative objectives of the project, it will look after the access to financial resources, deposits situation, credit outflow, overall payment system by the consumers and remittance.

Senior economists of the country, however, suspect ‘the intention’ and ‘the outcome’ of the project. “At a time when country is going through a difficult period and lacks ‘transparency’, what would be its credibility?” Prof Bishwambher Pyakuryal, president of Nepal Economic Association (NEA) doubted the intention of the World Bank.

“Some time ago, the World Bank has withheld budgetary support due to the changed political scenario of the country. How is the new project going to be kicked off?” he asked. He advised the government to approach it ‘with caution’. In such a project, ‘transparency’ is vital as the money is being funded by the World Bank, hiring external and internal experts, Prof Pyakuryal said. “Weak governance and capability have already hit the country hard in sound performance of such projects,” he said. It may be recalled that WB has already done a study on Nepal’s finance sector in 2002. “The survey would also help expedite the reform of Nepal Bank Ltd and Rastriya Banijya Bank,” Ferrari added.