current financial position ofnepal

Liquidity Problem in Financial sector in Nepal

Recently the Financial sector has faced serious liquidity problem. The liquidity problem has started since fiscal year 2066/67, when the maiost government had taken the policy of showing the sources of fund when the amount deposited exceeds NPR1 million. Liquidity problem became more serious, when Central Bank(Nepal Rastra Bank) had banned to invest in real estate collateral and order to commercial bank to maintain 25% real estate loan of total loan exposure. After NRB policy against investment in real estate, financial institutions are facing more liquidity problem. Number Of land broker were in increasing trend before the NRB policy, people made the land broker job as main as well as side job. The price of land had been increasing sharply. Broker has become billionaires and millionaires in whole night. But in now a days the billionaires and millionaires land broker are listed in black list of financial institution. Some broker has changed their occupation and tries to find alternative work or business. The problem has been increasing due to lack of the government spending. The business man and Bankers has been demanding Government to announce the budget in proper time and address the current situation, which may help to prevent the country from economic default. For one -two years, the capital creation in the country has been very slow. The cash which has been withdrawn from one bank has not been deposited in another financial institution, which is serious problem for the financial institutions as well as whole economic system of the country. Number of financial institution has been increasing rapidly since last three years. So Central bank is unable to monitor and control the institution. Governor directly announced that the NRB has not sufficient number of human resource for monitoring purpose in different public program. The result of lack of monitoring in financial institution, Nepal Bikas Bank and Samjhana finance has been undergoing in liquidation process. Similarly, the bankers have lost economic norms and values of financial principles. The case of Gurkha development bank, united bikas bank, Nepal share markets and peoples finance are the hot examples of financial crimes by bankers. The case of those institution, made general public undecided choosing the good performing financial institution. Among the different large depository institution of the country, the militiary wealfear fund has started to withdraw money from some development bank and finance company. Similarly the central bank itself returns back his deposit amount, which had maintained in different institutions.

Simple Nepalese economy

Nepal is developing county with an agricultural economy. In recent years, the country's efforts to expand into manufacturing industries and other technological sectors have achieved much progress. Farming is the main economic activity followed by manufacturing, trade and tourism. The chief sources of foreign currency earnings are marchandise export, services, tourism and Gurkha remittances. The annual Gross Domestic Product (GDP) is about US$ 4.3 Billion.

Agriculture : Eight out of 10 Nepalese are engaged in farming and it accounts for more than 40% of the GDP. Rolling fields and neat terraces can be seen all over the Terai flatlands and the hills of Nepal. Even in the highly urbanized Kathmandu Valley, large tracts of land outside the city areas are devoted to farming. Rice is the staple diet in Nepal and around three million tons are produced annually. Other major crops are maize, wheat, millet and barley. Besides food grains, Cash crops Like Sugarcane, oil seeds, tobacco, jute and tea are also cultivated in large quantities,

Manufacturing : Manufacturing is still at the developmental stage and it represents less than 10% of the GDP. Major industries are woolen carpets, garments, textiles, leather products, paper and cement. Other products made in Nepal are steel utensils, cigarettes, beverages and sugar. There are many modern large-scale factories but the majority are cottage or small scale operations. Most of Nepal's industries are based in the Kathmandu Valley and a string of Small towns in the southern Terai Plains.

Trade : Commerce has been a major occupation in Nepal since early times. Being situated at the crossroads of the ancient Trans-Himalayan trade route, trading is second nature to the Nepalese people. Foreign trade is characterized mainly by import of manufactured products and export of agricultural raw materials. Nepal imports manufactured goods and petroleum products worth about US$ 1 billion annually. The value of exports is about US$ 315 million. Woolen carpets are Nepal's largest export, earning the country over US$ 135 million per year. Garment exports account for more than US$ 74 million and handicraft goods bring in about US$ 1 million. Other important exports are pulses, hides and skins, jute and medicinal herbs.

Tourism : In 1998, a total of 463,684 tourists visited Nepal, making tourism one of the largest industries in the Kingdom. This sector has been expanding rapidly since its inception in the 1950. Thanks to Nepal's natural beauty, rich cultural heritage and the diversity of sight-seeing and adventure opportunities available. At one time, tourism used to be the biggest foreign currency earner for the country. Nepal earned over US$ 152 million from tourism in 1998.

Finance in Nepal

National policy on the financing of higher education is to recover the recurrent costs and shift the burden of higher education to the private sector. This paper, using the financial data pub-lished by University Grants Commission (UGC) and extracted from the financial statements of Pokhara University (POKU), attempts to analyze the financing pattern of higher education in Nepal. In gen- eral, it analyzes the overall financing pattern of higher education in Nepal and in particular of POKU during the last eight fiscal years (FY 1999 through 2006). This concludes that the level of budget for higher education in Nepal is relatively low and not enough to bring up the accessibility of qualitative higher education. Moreover, it concludes that government grants-both administrative and development, provided to the universities are not consistent during the study period.