Nepal eager to see Chinese banks on its land

The strategic presence of Chinese banks in Nepal is quite imperative to foster better business environment and bigger investment opportunities for both of the nations, said leaders from Nepal\'s central bank and the business community. \"Nepal could do a lot of things in the core business areas of infrastructure, tourism, service and trade if the banking service from any of the reputed Chinese banks is made available shortly,\" Yubaraj Khatiwada, governor of Nepal Rastra Bank (NRB), the country\'s central bank, told Xinhua Sunday. Provided that in the first seven months of the fiscal year 2012/13, Nepal has witnessed trading of 43.08 billion rupees ( around 497,750 U.S. dollars) and more than 100,000 tourists from mainland China, we can foresee enough business for Chinese banks to operate in Nepal,\" he said. Since the portfolio of Nepal-China trade, tourism and investment is on the rise, catering banking services in Nepal will be a prospective business to interested Chinese banks as well, Khatiwada said. He said as most contractors in bigger projects ranging from hydroelectric to telecom sector running in Nepal are from China, operating the banking services here is quite favorable for the banks in China. According to him, officials from the Export-Import Bank of China (EXIM Bank) have unofficially approached NRB seeking the operation of their venture in Nepal. \"In this regard, the deliberation is constantly going on at diplomatic level between the two neighboring countries as the EXIM Bank is interested to furnish its services here,\" said Khatiwada, hoping that the EXIM Bank will approach NRB formally in the upcoming days soon. When asked if NRB would amend its earlier stance of postponing the newer licenses to banks and financial institutions (BFIs) in the case of EXIM Bank, the governor showed green signal, saying \" We are not rigid in providing new license to strategically important foreign bank, which can derive bigger investments and advanced technologies to support our national priority.\" What\'s more, the business community in Nepal is willing to have international banking services from Chinese banks at the earliest. \"Once the Chinese banks operate here, we will indeed get much more facilities in various banking services like trouble-free processing of letter of credit (LC) to import goods and services from China,\" said Rajesh Kaji Shrestha, president of Nepal China Chambers of Commerce and Industries (NCCCI). He believed that the private sector could be benefited with credit facility as well while importing construction materials for infrastructural projects with the presence of Chinese banks in Nepal. Similarly, Suwarna Das Shrestha, president of Independent Power Producers of Nepal (IPPAN) urged interested Chinese banks for necessary arrangements to establish their venture in the soonest way possible. He said that as most of the commercial banks in Nepal delay in the process of issuing LC, it is quite troublesome to import hydropower equipment, which are quite necessary in infrastructural projects, from China. The NRB, at present, has halted the issuance of new licenses to BFIs following the recommendation of International Monetary Fund ( IMF) to ensure prudent regulation safeguarding the interests of public at large. However, EXIM Bank will have options to either operate its branch for wholesale banking in Nepal or operate simply a commercial bank in joint venture modality.