Services at passport department are still in shambles
It has been almost two months since Prime Minister Pushpa Kamal Dahal came to power. Soon after assuming office, Dahal issued a long list of directives to make services in government offices smooth and hassle-free for citizens. But there have hardly been any changes. People are still facing delays and difficulties in accessing government services. This is nowhere more evident than at the Department of Passport, one of the most busiest government agencies where hundreds of service seekers visit everyday to obtain passports. Lack of job opportunities at home is forcing many youths to go abroad for jobs, but getting a passport—the first step of foreign job application process—is riddled with delays and rigmarole, making their predicament more acute. Ask any service seeker visiting the Department of Passport, and they will tell you how the state that cannot provide them decent jobs at home is equally unable to issue them passports in a swift, hassle-free manner. Many of these service seekers are from outside Kathmandu and have taken loans to apply for overseas jobs. They are facing additional financial burden when they have to spend several days or weeks in Kathmandu to get their passports. It took Chandra Bahadur Bohora of Bajhang 20 days to get a passport. In this period, his expenses, including food and accommodation, were over Rs 50,000. "I came to Kathmandu because I was told that I could get my passport within a matter of days. But I had to go through so much trouble," said Bohora. "I don't know why the government is not doing anything about this." There are hundreds of people like Bohora who are putting up with the hardship of waiting in long lines and being fleeced by middlemen at the department on a daily basis. This is despite the introduction of the e-passport system in which applicants were supposed to receive their passports within three days of providing their biometric details. As service delays continue to mar the department, many applicants from outside Kathmandu are forced to spend a lot of money for their passports. Kapil Bishwakarma, who hails from Jhapa, came to Kathmandu to renew his passport because his online application was rejected four times. "I got my passport in the fifth attempt. Earlier, my application was rejected because apparently the biometrics details and photos of my old passport were not good,” he said. Bishwakarma’s expenses during his stay in Kathmandu were five times more than the fee charged by the government for the passport. He had no idea about the application process when he came to Kathmandu to renew his passport. “I was told it would take at least a month to renew my passport in Jhapa. Somebody told me, it could be done within 24 hours in Kathmandu. That is why I came here,” he said. “Why should we suffer for the shortcomings of the department?” Rajkumar Chaulagain of Okhaldhunga felt like he had won a war when he finally received his passport. "I had to spend Rs 40,000 to get the passport," he said. Like Bohora and Bishwakarma, he too had come to Kathmandu for urgent passport service. The involvement of middlemen makes it even more challenging for ordinary citizens to obtain passports. Ishan Khadka of Dolakha said some middlemen are charging up to Rs 10,000 from innocent service seekers just for online forms that are available for Rs 250. “There is no one to stop them. It's sad to see Nepalis exploiting fellow Nepalis," he said. "The government's system is only benefiting the middlemen. Those having connections with leaders and senior officers can complete the process in less than an hour. There is no assistance available for commoners like us." There is a daily demand for more than 10,000 units of passports across the country. However, the department is printing only around 6,000 units a day. There is also issue with the server not being able to handle large volume of applications. An official at the department said the server is designed to handle a maximum of 2,500 users per second. “When the number of users exceeds its limit, the server crashes causing delay in service delivery,” he said, adding that they were planning to increase the server’s capacity.
Sharp decline in net FDI inflow
There has been a sharp decline in foreign direct investment (FDI) inflow in Nepal in the current fiscal year. The net FDI inflow to the country has plunged by 93.4 percent in the first half of FY 2022/23. Nepal saw a net FDI inflow of Rs 749.4 million in the first half of this fiscal compared to Rs 11.34 billion during the corresponding period of the last fiscal. Nepal is one of the countries that receive the lowest FDI in the world. Despite many talks on attracting FDI in the country, the country has failed to attract foreign investors as expected. While net FDI is on the decline, repatriation is on the rise, as per NRB statistics. Foreign investors have repatriated Rs 1.80 billion in the first half of this fiscal. Such repatriation during the first half of the last fiscal stood at Rs 268 million. Not only net FDI, but FDI pledges in the country also dropped significantly during the first half of the current fiscal year. As per the latest statistics of the Department of Industry (DoI), FDI commitments dropped by 43.27 percent in the first six months of FY 2022/23. FDI commitments totaled Rs 17.30 billion in the review period compared to Rs 30.50 billion in the corresponding period of FY 2021/22. Economists attribute the decline in net FDI inflow to global economic recession. According to them, the global economy that was coming out from the impact of the Covid-19 pandemic has been hit hard by the Russia-Ukraine conflict and the rise in prices of commodities. Economist Chandra Mani Adhikari said that foreign investment in Nepal has decreased due to the global economic recession. "The world economy has been impacted by the Russia-Ukraine conflict as it pushed the prices of commodities, especially oil, coal, and gas, and disrupted the supply chain," said Adhikari. Economists say it is necessary to improve the existing policy and structural system to bring more foreign investment into Nepal. According to them, while the immediate reason for the decline in FDI might be the global recession, there are structural and procedural obstacles in Nepal that discourage investors. The private sector says there is no coordination on policy and institutional matters regarding foreign investment. There is a trend of announcing various facilities to attract investors but not implementing them, they said. Despite introducing a one-door system in the Investment Board Nepal and Industry Department, FDI has not come in as expected. Of late, the government has eased procedures related to FDI. In November last year, it lowered the minimum threshold for FDI to Rs 20 million from Rs 50 million to attract even small foreign investors in the country. “The threshold was reduced as per suggestions from stakeholders,” said Tiwari. “The decision is expected to encourage FDI in the information and communication sector, which does not need big investments in physical infrastructure.” And, in January this year, Nepal Rastra Bank allowed a company with foreign investment operating in Nepal to borrow up to 100 percent of the paid-up capital from its parent company. Earlier, it was restricted to 60 percent of the paid-up capital. Such companies can also pay an interest rate as high as a one-year benchmark interest rate plus 3.5 percent per annum, up from a one-year benchmark interest rate plus a three percent additional rate per annum earlier. The NRB has also allowed foreign investors to record their FDI details at the central bank by mid-January 2024. Likewise, companies bringing foreign loans can also record such borrowings by mid-January 2024. Nepal’s Foreign Investment and Technology Transfer Act has permitted bringing both FDI and foreign loans. Net FDI in Nepal (First six months)
| FY Net FDI 2022/23 Rs 749.4 million 2021/22 Rs 11.34 billion 2020/21 Rs 7.65 billion |
Digital payment systems outshine traditional modes of payment
The adoption of digital payment systems by consumers and businesses has gained fast momentum over the last three years. As the start of the Covid-19 pandemic in early 2020 forced people to stay inside their homes for months, digital transactions took a giant leap. Backed by the increasing use of smartphones and other computing devices, consumers were fast to adopt digital modes of payments and online shopping to buy daily essential items. Primarily, the retail payment systems in Nepal consist of cheque-clearing, electronic fund transfer, card payment systems, QR code-based payment, e-money, and remittances. Digital payment instruments like mobile banking, cards, QR code, connectIPS, e-wallets, internet banking, POS machines, etc. have been extensively used owing to the fear of transmission of coronavirus from physical modes of payments such as cash and cheques. The usage of digital transactions also increased with licensed institutions working to modernize existing instruments and innovate new payment tools. The faster adoption of new payment systems has further acclimatized users to digital banking rather than branch-based banking. While payments through electronic modes have also taken a beating in this fiscal year due to a sharp slowdown in economic activities, there is no doubt digital payment will be the increasingly preferred mode of payment in the coming days. Although the momentum in digital payments took pace in early 2016 and gained prominence in 2020, the foundational arrangements for modernizing the payment systems started in 2014. The National Payment Systems Development Strategy (NPSDS), 2014 was formulated to further develop the payment system. A recent report by Nepal Rastra Bank (NRB) titled 'Payment Systems Oversight Report' shows there has been growth in the number of Payment Service Providers (PSPs), PSPs Agent, Wallet Users, connectIPS Users, and Interbank Payment System Members in the last three years. "There has been a rapid increase in the user base of e-wallets and connectIPS post-pandemic," states the report. According to NRB, the number of wallet users increased from 6.27 million in mid-August 2020 to 13.68 million in mid-July 2022. Similarly, the number of connectIPS users increased from 162,117 in mid-August 2020 to 896,341 in mid-July 2022. The number of Interbank Payment System members has also increased to 111 members. Post-pandemic, digital instruments like connectIPS, e-wallets, mobile banking, internet banking, QR code, and cards have widely been used as customers can use these instruments in self-service mode. Similarly, e-commerce and POS transactions have also gained prominence after the beginning of the pandemic. According to the report, the number and value of connectIPS transactions have grown by 109.3 percent and 127.1 percent respectively from FY 2020/21 to FY 2021/22. Similarly, QR code-based payment is the most widely used digital payment instrument in the country. The number and value of QR-based payments have surged by 382.8 percent and 366 percent respectively from FY 2020/21 to FY 2021/22. The retail payment systems in Nepal are mainly operated by Nepal Clearing House Limited (NCHL), which provides image-based cheque-clearing solutions and electronic fund transfer facilities to customers. Similarly, FonePay Payment Services Ltd. provides the platform for QR payments and mobile banking services to BFIs. Other major operators in the card payment landscape are SmartChoice Technologies (SCT) and Nepal Electronic Payment Systems (NEPS) Ltd. Internationally recognized institutions like Visa Worldwide, Union Pay International Company, and MasterCard Asia/Pacific are also operating as PSOs in Nepal. The central bank has distributed licenses to 37 institutions to operate as PSPs and PSOs. Of them, 27 are PSPs and 10 are PSOs. RTGS transactions value up by 105% The Real Time Gross Settlement (RTGS) system has processed large value payments with 40.6 percent and 105 percent growth in the number and value of transactions respectively in 2021/22 compared with FY 2020/21. The central bank has been operating the Real Time Gross Settlement (RTGS) system for large value and critical payments since September 12, 2019. The RTGS is an electronic fund transfer system in which the transfer of funds between one bank/financial institution to another takes place in 'real time' and on a 'gross' (transaction by transaction) basis, without bundling or netting debit and credit transactions of a participant. The RTGS system has replaced the manual process to clear large value and critical payments in NRB’s General Ledger System with an automated and real-time payment process. ECC transaction value surged by 8.9% The number and value of Electronic Cheque Clearing (ECC) transactions have grown by 13.2 percent and 8.9 percent respectively in 2021/22 compared with FY 2020/21. Electronic Cheque Clearing (ECC) system allows the BFIs to accept and present interbank cheques for clearing and settlement. NCHL has been operating the ECC system, which offers high-value, express, and regular cheque-clearing options to customers. BFIs use the ECC portal to scan the cheques and present them for clearing and settlement. Use of cards for e-commerce declining While the usage of Point of Sale (POS) is increasing, a decline in e-commerce or online payments using cards has been seen. The number and value of online payments using cards have reduced by 39.1 percent and 46.8 percent in 2021/22 as compared with FY 2020/21. With many customers opting for cash-on-delivery options for e-commerce payments, there may have been a decline in e-commerce transactions through cards. Further, online sites have integrated wallets and instant payment systems for online payment, providing cardless digital payment options to customers. "A detailed study is required to identify the reason behind the decline in e-commerce transactions through cards," reads the report. NRB increases paid-up capital of PSPs and PSOs NRB has increased the paid-up capital of entities involved in the digital payment business. Issuing a new licensing policy in January, the central bank has increased the paid-up capital for payment service providers (PSPs) and payment system operators (PSOs). As per the new arrangement, the paid-up capital of PSPs operating devices other than payment cards has been fixed at Rs 50 million. The paid-up capital of PSPs operating payment cards and other devices has been fixed at Rs 250 million. Similarly, the paid-up capital of PSOs has been fixed at Rs 400 million, while PSOs handling payment transactions outside Nepal through payment instruments issued in the country have to raise their paid-up capital to Rs 800 million. NRB has set a deadline of 2028 for the existing PSPs and PSOs to meet the new paid-up capital requirement. The companies that have already obtained licenses from the central bank, have to maintain the paid-up capital as prescribed by the NRB by mid-July 2028," states the policy. Access on Payment Systems
| Particulars | Mid-August, 2020 | Mid-July, 2021 | Mid-July, 2022 |
| PSPs Agent | 5,139 | 9,279 | 12,685 |
| Wallet Users | 6,274,129 | 8,885,914 | 13,675,993 |
| connectIPS Users | 162,117 | 534,615 | 896,341 |
| Electronic Cheque Clearing Members | 65 | 60 | 59 |
| Interbank Payment System Members | 85 | 103 | 111 |
| Debit Card | Credit Card | Prepaid Card | ||||
| Number (in ‘000) | Growth (%) | Number (in ‘000) | Growth (%) | Number (in ‘000) | Growth (%) | |
| Mid-July, 2018 | 5,544 | 105 | 97 | |||
| Mid-July, 2019 | 6,709 | 21.0 | 123 | 17.1 | 67 | -30.9 |
| Mid-July, 2020 | 7,329 | 9.2 | 160 | 30.1 | 64 | -4.5 |
| Mid-July, 2021 | 8,840 | 20.6 | 192 | 20.0 | 68* | 6.3 |
| Mid-July, 2022 | 10,856 | 22.8 | 239 | 24.5 | 109* | 60.3 |
| Currency | 2020/21 | 2021/22 | ||
| No. of Transaction | Amount (in million) | No. of Transaction | Amount (in million) | |
| NPR | 5,22,174 | 2,04,45,704.04 | 733,795 | 4,15,61,970.8 |
| USD | 10,364 | 688.04 | 14,774 | 828.12 |
| EUR | 702 | 161.09 | 1,098 | 222.83 |
| GBP | 426 | 3.23 | 582 | 4.96 |
| JPY | 175 | 1,891.12 | 348 | 75,633.62 |
| Month | FY 2021/22 | FY 2022/23 |
| Shrawan | Rs 3612.083 billion | Rs 5688.626 billion |
| Bhadra | Rs 3920.982 billion | Rs 4926.715 billion |
| Ashoj | Rs 4705.105 billion | Rs 4605.317 billion |
| Kartik | Rs 4931.923 billion | Rs 3946.194 billion |
| Mangshir | Rs 4845.953 billion | Rs 3697.658 billion |
| Push | Rs 5141.668 billion | Rs 4145.904 billion |
| Total | Rs 27157.714 billion | Rs 27010.414 billion |
Where do unclaimed bodies go?
Binaya Jung Basnet, founder of Action for Social Change, an organization that performs the last rites of unclaimed dead bodies among other social works, says he has incinerated 719 bodies at the crematorium at Pashupatinath Temple in the past 10 years of working in this field. Most of the corpses didn’t have any identification on them, and the ones that did had no known relatives to claim the bodies. According to Nepal Police, in the fiscal year 2021/22, there were a total of 377 unclaimed bodies, out of which only 29 were identified. Similarly, for the first four months of the fiscal year 2022/23, there were a total of 139 unclaimed bodies, out of which only 14 were identified. Most of the bodies found were of men. “Majority of the bodies found are those of the people living on the streets,” says Poshraj Pokharel, spokesperson, Nepal Police. Since every district has a hospital responsible for the post-mortem, the bodies are sent to those particular hospitals to begin the process of identification. “But rarely is there a case when we are able to identify the dead right away,” he adds. The reason behind not finding the identity of these individuals is because most of them have been living on the streets for a long time, and don’t have any known relatives in that area. “We sometimes find generic information like their first name, which is not enough for us to determine their identities,” says Pokharel. Basnet adds that there are some cases when people migrate to another district, with no one searching for them either, so the identification becomes difficult. “Some are also found to be mentally unstable, which is why no one knows who they are and where they have come from,” he says. Still, there are a few protocols that Nepal Police follows in order to identify and find some relatives of the dead, with the assistance of the Department of Forensic Medicine, in the district where the body was found. Once the body is sent for post-mortem, the forensic department first identifies the cause of death, while the police circulates images of the body within its department to check if they have been listed as one of the missing persons in the past. “In most cases, there is no registration,” says Pokharel. The forensic department keeps a record of the body’s estimated age, sex, height, birthmarks or any other distinct feature that might make the identification easier. They take photographs of the body, clothes, and other personal belongings, as well as a sample of their teeth or a bone in case someone is looking to get the DNA tested. All this is done following the Unidentified and Unclaimed Bodies Management Guideline, 2021, issued by the government. The guideline also has a protocol where some of these bodies can be sent to medical colleges for the purpose of studying and examination, if they haven’t been claimed within the timeframe issued on it. According to Dr Govinda Kumar Chaudhary, the head of department for the Department of Forensic Medicine, Tribhuvan University Teaching Hospital (TUTH), every year, around 30-40 bodies are sent to various medical colleges around Nepal, that too only from the forensic department at TUTH. Chaudhary further mentions that the main causes of death found so far are pneumonia and liver failure. “Most people we have encountered have died because of cold weather, or alcoholism, and are above the age of 50,” he says. The number of deaths is comparatively higher during the winter season. The dead bodies are kept in the morgue for 35 days to three months, before they are sent out for incineration at the Pashupati Electric Crematorium. Although Chaudhary believes there aren’t as many unclaimed bodies these days as before, there is still a problem of not having enough space at the morgue to store the dead bodies, especially outside the valley. Currently, TUTH is the only hospital that can accommodate up to 150 corpses at a time. The number is quite less for other forensic departments outside Kathmandu. Dr Srijana Kunwar, associate professor at Department of Forensic Medicine, Patan Hospital, mentions that they can accommodate only 10 bodies. The government, however, has decided to allocate more budget in order to expand the space. Because of this issue, the unclaimed bodies need to get cremated as quickly as possible. For the ones found in other districts, Pokharel mentions that the bodies can only be kept at the morgue for around 7-10 days, in order to make space for the new ones that arrive. “This is a huge problem since most bodies get cremated before they are identified,” adds Basnet. There are some rare instances where the individuals are identified, but don’t have any known relatives to claim their bodies. Basnet mentions that, in several cases, families have abandoned their loved ones after their demise at the hospital, since they don’t have money to pay for the funeral. “They end up spending all their money in treatment, and performing the last rites at the Pashupati Aryaghat costs around Rs 18,000 which they cannot afford,” he adds. People who pass away during medical treatment or from a natural cause aren’t sent for post-mortem. They are taken to the Pashupati Electric Crematorium either by the Nepal Police or Basnet and his team. Besides the ones handed over to Basnet, the Nepal Police is in charge of the incineration. Before the establishment of Pashupati Electric Crematorium in 2016, the bodies used to be cremated at the Aryaghat in Pashupati, which Rewati Raman Adhikari, spokesperson, Pashupati Area Development Fund, says wasn’t a feasible solution. “Factoring in the cost, the pollution it creates, and the number of bodies that arrive each day, electrical incineration is definitely the more viable option,” he adds. The crematorium has three incineration chambers, out of which only one is currently functional, and the rest are under maintenance. The crematorium charges Rs 4,000 per incineration, and the Nepal government has assigned a budget in order to pay for each cremation. “I pay for the ones I incinerate, whereas Nepal Police depends on that budget,” adds Basnet. Although the process of cremation is going smoothly, Adhikari mentions that there are days where the number of bodies arriving at Pashupati is above 20, in which case cremation becomes difficult. “It mostly happens during accidents with a large number of casualties, and the hospitals need to clear out their cold rooms,” he says. “In that case, the crematorium is compelled to incinerate two bodies at once.” The problem, Basnet believes, behind the unclaimed and unidentified bodies starts with the increasing number of people living on the streets. “As I also work on rehabilitating these individuals, I know for a fact that establishing a proper shelter for these homeless individuals is the only way of decreasing the number of unclaimed bodies in Nepal,” he adds. Pokharel adds that Nepal Police, along with government authorities are doing their best to tackle this problem, and claims that the number of unclaimed bodies have been slowly decreasing in the past years. “It will definitely take some time, but I’m hopeful that this issue will soon have a proper solution,” he says.
