Laxmi Bank Starts Internet-based Remittance Service

Laxmi Bank has launched its Internet based remittance service branded as "Laxmi Bank - eXpress Money Transfer" (eMT) to facilitate transfer of money from abroad and between various points within Nepal . The service will first be started from Malaysia , the country from where Nepal receives about 20 per cent of its total remittance. Beneficiaries of remittances made through eMT can get money within minutes of the transfer having been completed at the remitter's end, claims the bank.

The banks says, eMT has been especially designed to facilitate remittances for the "unbanked" or people who do not have bank accounts - either because they do not fulfil the bank's criteria for opening an account or because they do not have physical access to its branches. Sanjeev Joshi, manager of Branches and Global Network at Laxmi Bank informs that the bank has already set up a network of about 100 agents across Nepal , many of which are financial institutions, to facilitate money transfers. The bank plans to increase the number of agents on a need basis to cover the whole country.

According to the bank, it has already tied up with Merchantrade Asia Sdn Bhd, a Malaysian company, to channelise remittance from Malaysia where this service is branded as Merchantrade Express Remittances. This service will be expanded to Gulf countries and the UK within the next 12 months, says Suman Joshi, CEO of the bank.

The Head of Information Technology at Laxmi Bank, Jiwan Limbu, the chief architect of Laxmi Bank eMT claims that this system operates at an enhanced security level.

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Nepali Reinsurance Company Mooted

The government-owned Rastriya Beema Sansthan is trying to set up a reinsurance company jointly with some foreign companies. According to sources, RBS is presently negotiating with four foreign companies though the names of these companies were not disclosed.

The plan is to start business with non-life insurance and gradually take up life insurance as well.

The proposed company is to have Rs. 3 billion as paid up capital as per RBS's proposal but the foreign investors have asked for further information to justify this high capital base, according to RBS sources.

Presently, the gross premium collection in the non-life insurance business in Nepal is about Rs. 7 billion per annum and a significant portion of it is going abroad for reinsurance. This outflow is as high as over 90 per cent of the gross premium in certain classes of insurance.

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Now Eight Development Regions

Concluding that the existing division of the country into districts, zones and regions is not effective for development planning, the National Planning Commission (NPC) is going to prepare the three-year interim plan on the basis of eight development regions, according to NPC member Bhim Prasad Neupane.

Neupane also informed that while the existing Western Development Region will be divided into three, the existing Central Development Region will be divided into two regions.

Similarly, there will now be 13 development centres instead of the existing five. The new centres will be Bhadrapur, Biratnagar, Dharan, Janakpur, Kathmandu, Birganj, Hetauda, Bharatpur, Siddharthnagar, Butwal, Pokhara, Nepalganj and Dhangadhi.

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CEO's Salary: up to 12.4 Million Per Annum

With the new Company Act in place, the salaries and bonuses of the chief executives in public limited companies have started to become transparent. While some banks have clearly stated the salaries of their top rung people in their financial statements, others have only shown the total remuneration given to the employees.

Sujit Mundul, CEO of Standard Chartered Bank Nepal , tops the list of the highest paid CEOs with his salary, bonus and allowances amounting to Rs. 12.4 million in the fiscal year 2005-6. His bank, which has the highest share value in the stock market at the moment, distributed a cash dividend of Rs.130 per share and bonus shares in the ratio 10:1 to its shareholders that year.

During the same year, Nepal Investment Bank paid Prithivi Bahadur Pande, CEO of the bank, Rs. 9.59 million which includes his salary, bonuses, Dashain allowances and contributions to his provident fund. Meanwhile, the bank has also given 20 per cent cash dividend and 35.46 per cent bonus shares to its shareholders.

Similarly, Siddhartha Bank's CEO, DC Khanna, received Rs. 7.381 million as remuneration. But the bank hasn't distributed any dividend to its shareholders.

In the same year, the salary, bonus and allowances of Ashok Shamsher Rana, CEO of Himalayan Bank, amounted to Rs. 7.543 million. The bank issued 5 per cent bonus shares and 30 per cent cash dividend to its shareholders. Also, Nabil Bank paid Rs. 5.74 million to its CEO, Anil Shah. The bank handed out Rs. 85 per share as dividend to its shareholders.

Suman Joshi, the CEO of the relatively young Laxmi Bank, received Rs. 5.56 million in the same year. Even though the bank has made astounding profits in its fours years of operation, it has not distributed any dividend citing the regulations of the Central Bank that prevent it from doing so.

Among the development bank CEOs, Sudhir Khatri of Development Credit Bank was the highest paid, drawing Rs. 3.896 million in salary, bonus and allowances. His bank distributed 0.63 per cent cash dividends and 12 per cent bonus shares to its shareholders out of the profits of the year. CEO of Ace Finance, Siddhant Raj Pande's salary summed up to Rs. 3.3 million. His company has issued 20 per cent dividend and bonus shares in the ratio 5:1.

Similarly, Sanima Development Bank, established in 2061 BS, gave Rs. 2 million to its CEO, Badri Prasad Ojha, in the previous year. The company, having the highest paid up capital among the development banks, has not distributed any dividend or bonus shares to its shareholders.

Nepal Development Bank, which has not been able to distribute dividends, has paid Rs.1.4 million to its CEO Sanandan Singh.

Oriental Hotels, which has been operating Hotel Radisson, paid Rs. 1.95 million including bonus, salary, and Dashain expenses to its Managing Director Bidya Krishna Shrestha.

However, many other companies have not clearly publicised the salary and remunerations of their chief executives. They have only published the total amount paid to the employees.

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