PAN must for loans above Rs 10m

Kathmandu, Aug, 17, 2012

Nepal Rastra Bank (NRB) has made it mandatory for borrowers borrowing more than Rs 10 million from financial institutions to have Permanent Account Number (PAN).

The central bank has made the provision mandatory in order to keep the large borrowers under the tax administration’s scanner. “Though there are some 700,000 people who have borrowed from banks for commercial purposes, only 500,000 are registered with PAN, according to Inland Revenue Department data,” said the department’s deputy director general Madhu Kumar Marasini.

The central bank has also brought a bunch of regulations in line with the year’s monetary policy. According to the circular, the new cash reserve ratio rule will be implemented from

August 19. This year’s monetary policy had hiked up cash reserve ratio to six per cent for commercial banks, 5.5 per cent for development banks and

five per cent for finance companies due to ample liquidity in the market.

Even microfinance institutions have to maintain a cash reserve of two per cent of their total deposits. Central bank has also fixed eight per cent bank rate that will be applicable for loans under lender to last resort facility and standing liquidity facility along with the discount rate of government securities, in the circular as announced in the monetary policy.

As for deprived sector lending, financial institutions can increase 0.25 percentage point by mid-January 2013 and another 0.25 per cent point by the end of the current fiscal year. The monetary policy has increased deprived sector lending by banks to four per cent of total lending, 3.5 per cent for development banks and three per cent for finance companies –– a 0.5 percentage point increment from last year.

Likewise, NRB has increased the limit on microfinance loans to Rs 300,000 against acceptable collateral, provided the borrower belongs to a microfinance group, while a microfinance borrower without a microfinance group can obtain loans of up to Rs 60,000 only.

NRB has extended the scope of agriculture loans to agro tools, fertilisers, seeds and saplings, storage and also processing of tea, coffee, ginger and fruits. Moreover, it has asked commercial banks to assess potential risks apart from identified ones based on Internal Capital Adequacy Assessment Process (ICAAP) Guidelines and prepare ICAAP Policy before mid-January 2013.

Source: THT

Govt to register firm, issue PAN from single spot

KATHMANDU, May 19, 2012

Entrepreneurs would soon find themselves free from the need of approaching multiple government offices to get their firms registered and acquire permanent account number (PAN), if things moved on as smoothly as the government has planned.

By just approaching the Company Registrar´s Office (CRO), which is an agency where all businessmen need to visit for registering their businesses, they will be able to list the firm with the tax office and get the PAN while registering the firm itself.

The new arrangement has already been worked out and Inland Revenue Department (IRD) and CRO have already signed a memorandum of understanding to implement it at the earliest, said an official. “We are already in the final stage of implementing this facility,” said Company Registrar Keshav Thapa.

Once in place, the new mechanism will drastically reduce paperwork and hassles for businesses and industries. So far, entrepreneurs first need to register their firms at the CRO and then approach Inland Revenue Office to register the firm with tax and get the PAN.

The new mechanism will reduce the procedures to start a business, which currently comprises 7 procedures, according to International Finance Corporation (IFC).

Likewise, the government is also preparing to launch a licensing electronic portal in a bid to facilitate gathering of information and apply for different types of licenses, permits, related laws and regulations and necessary documents through one window. “We are preparing to launch the portal by the end of May 2012,” said Mahendra Man Gurung, joint secretary at the Prime Minister´s Office.

The government has taken these new initiatives mainly with an aim to project Nepal as easy destinations for doing business, particularly considering Investment Year 2012/13.

Under the reforms aimed at improving Nepal´s performance on Doing Business indicators, which the World Bank Group publishes annually, the government has already reformed registration procedures for approval of licensing and approval of foreign direct investment (FDI) at the Department of Industry.

“Together, these reforms have eliminated seven steps in the FDI approval process,” said Gurung.

Gurung and other officials disclosed these development and unveiled upcoming plans to cut hassles of starting business in Nepal while reviewing implementation of reforms. Office of the Prime Minister and Council of Ministers, Ministry of Industry and Nepal Business Forum Secretariat had jointly held the review workshop this week.

Source: Republica