IFC asked to buy NBL stake

BY MILAN MANI SHARMA

WASHINGTON, D.C., Oct 15 - The government has invited the International Finance Corporation (IFC), a private sector wing of the World Bank (WB), to acquire stake in the troubled Nepal Bank Limited (NBL) along with taking over its management. The NBL is one of the ...

The proposal was made when the Nepali delegation led by Minister for Finance Dr Baburam Bhattarai, that is attending the joint annual meetings of WB and International Monetary Fund (IMF), met with IFC Vice-President F Khambata.

During the meeting, the IFC informed the Nepali delegation, without naming names, that it had tried to buy a stake in a Nepali bank in a bid to make its presence felt in the country, but that it had failed because its shares had been highly priced.

Responding to this eagerness, the Nepali delegation, often flayed by donors for not working out a concrete strategy for the bank’s privatisation, proposed that it buy the government’s share and take over its management.

The government has a 40 percent stake in NBL, the second largest bank in the country in terms of deposits and investments. “We urged the IFC to take over the management by acquiring 5-10 percent stake at the bank currently held by the government,” said a member of the delegation. He informed that the IFC had shown much interest in the proposal.

The IFC, which works to foster the private sector through international lending, is already engaged with commercial projects like Jomsom Resort and Buddha Air in Nepal. It had also bought shares of the Bhote-Koshi hydropower project.

The source added that the IFC had also operated a public sector bank in Romania with successful results.

“We will soon hold a meeting of the Financial Sector Reform High Level Committee headed by the finance minister and send a formal proposal to this end to the IFC,” stated the official.

FM addresses meeting Meanwhile, Finance Minister Dr Bhattarai Monday addressed the joint meeting of the Board of Governors of the IMF and the WB.

The meeting, attended by finance ministers from 184 countries, remained dominated by the global financial crisis. Poorer countries, on the other hand, tried to draw the attention of the advanced countries to issues of their concern, like rising food and oil prices, and urged them not to cut aid amid the financial crisis.

“The advanced countries are focused at correcting their domestic woes emanating from the financial crisis, but I urge them not to lose sight of the needs of under-developed and developing countries,” said Dr Bhattarai, echoing the voice of the smaller economies at the meeting.

In his address, Dr Bhattarai also appealed to the international community to work together to wipe out poverty and sought special support for conflict-hit countries like Nepal. He also highlighted the latest political changes in Nepal and the new government’s economic plans, apart from expressing the government’s commitments to improve governance and control corruption.