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Due to a glitch in its electronic payment system, Siddhartha Bank, an ‘A’ class commercial bank, has lost around Rs 4.2 million. Two thieves apparently used an ATM card which had no balance in it to withdraw the said amount. Police have arrested Jagat Gurung, 57, and Sabitri Tamang, 30, in connection with the incident. The police have also recovered over Rs 3 million in cash from their rented room. The duo is said to have used a foreign ATM card to withdraw money from Siddhartha Bank’s various ATM counters. The two are currently in custody and being investigated.

The series of cash withdrawal began on June 27, when one of the accused thieves tried to withdraw money from one of Siddhartha Bank’s ATM counters in Kathmandu using an expired ATM card. The attempt worked and from then on, the duo went around withdrawing cash from the bank’s ATM booths across the city, with the bank having no idea of these illegal transactions. Only after the duo had withdrawn over Rs 4.2 million cash in under two weeks did the bank discover the hanky-panky.

Starting from Rs 6000, the duo has allegedly withdrawn different amounts in the said period. The police see this as a problem between Siddhartha Bank and Nepal Electronic Payment System (NEPS), its service provider for cards related transactions. According to the police, NEPS did not know of the theft until the bank informed it. This is not the first time NEPS’ faulty system has allowed financial frauds. Previously, too, Chinese criminals had hacked into the NEPS’s system to withdraw millions of rupees.

The reason behind the system’s malfunction is not known. Also unknown is whether this is an isolated event or if glitches like these have happened and went unnoticed in the past as well. This ultimately puts Siddhartha Bank’s customers at risk. The ‘A’ grade commercial bank, which also advertises itself as one of the biggest in the country, needs to fortify its software and reconsider its membership with NEPS to win back the trust of its customers.

Nepal imported Rs. 28.60 billion worth of rice in the first 11 months of the fiscal year.

Even as various programs are being implemented to boost paddy production, the import bill of rice is rising. In the previous fiscal, rice worth Rs. 26.61 billion was imported from various countries.

In the current fiscal, Nepal produced only 5.62 million tons of rice, an insignificant increase from last year’s 5.5 million. In the past 10 years, various officials, including the prime minister and the agriculture minister, have been announcing self-sufficiency in paddy in the next three to five years. However, due to the non-implementation of plans and policies, more and more rice is being imported every year. Nepalis now have to depend on imported rice throughout the year.

The Ministry of Agriculture and Livestock Development started a large-scale paddy production program in 15 districts from 2072/73 (2015/2016), expanding to 35 districts in 2073/74. The program aimed to increase her hectare productivity from 3.1 metric tons to 4 metric tons, to no avail.

The ministry also launched a program to promote fine and fragrant grain products in 20 districts from 2014. Under this program, 50 percent subsidy was provided for resource seeds and there was also a subsidy for green manure. Rs. 35 million-Rs. 45 million was annually allocated for this program.

The Prime Minister's Agriculture Modernization Project came into operation from the fiscal 2073/74 (2016/2017) to boost paddy production and reduce imports. Under this project, paddy plantation was divided into 24 blocks, five zones, and one super zone.

In 2017, the government had announced that the country would be self-reliant in paddy within five years. The target was to increase production from 51.51 million tons that year to 86.79 million tons in five years. However, with only one year left to reach the mark, the government has failed to meet that target.

Dozens of government programs have been launched in the last decade to make the country self-reliant in paddy. Paddy is grown on 47.5 percent of the cultivable land in Nepal. Last year, paddy was planted in 1.47 million hectares. Of this, the share of the Tarai region is 70 percent, both in terms of area and production.

“The inflow of remittance has increased the number of people who want to live an urban lifestyle. Consumers prefer aromatic, fine, long-grain rice. Thus the import of such varieties has increased,” says Yogendra Karki, secretary at the Ministry of Agriculture. 

According to Karki, a ‘rice mill model’ program has also been launched to increase paddy production. The rice produced under this program will be purchased directly by rice mills at fixed prices. Similarly, a plan has been implemented to develop fine and fragrant varieties of paddy in collaboration with the International Rice Research Center (IRI).

“The results will be visible gradually,” says Karki. “In the next three years, however, we will become an exporter of paddy.”

The ministry has projected six million tonnes of paddy production next year. Nepal’s annual demand is 6.7 million tonnes.

Smart Telecom Private limited has recently filed a petition with the Ministry of Communications and Information Technology seeking a further extension on the Rs 6 billion in arrears it has to pay to the government. The private mobile network service provider, which has been unable to establish itself in the Nepali market, is asking for a further one-year extension. Smart Telecom has also submitted the same request to the Nepal Telecommunication Authority.

This is not the first time the company has failed to clear its arrears and got the payment deadline extended through lobbying. The NTA had decided to cancel Smart Telecom’s license two years ago for repeatedly failing to pay up. Despite the NTA’s decision, the Council of Ministers had stepped in to protect the company and decided to extend the payment deadline while also giving Smart Telecom the option of clearing its dues in installments.

In a September 2020 Cabinet decision, the deadline was extended by six more months. Back then, the NEA was given a three-point directive by the Ministry of Communications, which stated that if the company failed to pay its arrears in the next six months, the NTA could revoke its license and also confiscate its properties and assets.

“In case of non-payment of dues within the stipulated period, the authority will take necessary legal action to revoke the license and make appropriate arrangements for the continuity of service for the company’s customers,” the letter sent by the ministry to the NTA read. However, come February 2021, the Council of Ministers again extended the deadline till the end of the current fiscal year, i.e mid-July.

It has been learnt that despite repeated extensions and installment facility, Smart Telecom has failed to pay its liabilities to the government, accrued under various headings such as frequency fee and license renewal. According to the NTA payment plans, the company had to pay a frequency fee of Rs 598.86 million in the first installment, Rs 832.3 million in the second, Rs 774 million in the third, Rs 715.6 million in the fourth, and Rs 657.2 million in the fifth. Besides the set installments, Smart Telecom also has to pay another Rs 1.25 billion in license renewal fees.

Just over a decade ago, the Civil Group was one of the biggest names in the Nepali corporate world. Group chairman Ichchha Raj Tamang Chairman rode the real estate bubble between the late 2000s and mid-2010 and profited handsomely. A qualified engineer and capable entrepreneur, Tamang became one of the pioneers of housing projects in Nepal. He then entered the banking sector.

Civil Homes, Civil Mall, Civil Bank, Civil Saving and Credit Cooperative, among two-dozen ventures, comprise the Civil Group. But the success story of Tamang turned sour as quickly as he had risen to fame, with multiple accusations of financial discrepancies and unscrupulous business practices.

Early 2020 saw the Department of Money Laundering Investigation initiate a probe into Tamang after financial transactions exceeding the given limit were made through his bank account. Tamang, also the chairperson of Civil Bank, along with his partner Keshav Lal Shrestha, had allegedly transferred more than Rs 1 billion from the account maintained by Civil Hotels at Civil Bank to the account of Civil Apartments in the same bank, all owned and operated by Tamang.

The department had also asked Civil Bank’s clarification on why it had not reported suspicions over those transactions to Nepal Rastra Bank. The result of the investigation is yet to be made public. When ApEx inquired about it with the department, we got the reply that “no information on this case can be divulged now”.

Just before the Civil Bank controversy, which lost the bank considerable goodwill, Civil Group’s Pokhara-based Civil Saving and Credit Cooperative also declared it was facing bankruptcy after mass withdrawals following reports of its impending collapse. The cooperative had overextended with its ambitious investments in real estate, hotel and hydropower, without earning the trust of account holders. It had invested around 90 percent of its deposits totalling Rs 7.5 billion in the realty business operated by the group.

Around the same time, Tamang also had a controversial fallout with his business partner Lal Kaji Gurung, a major shareholder in Civil Cooperative and also a partner in Civil Mall. This financial dispute led to court cases, further engulfing the group in controversy.