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DFID manna may shrink: NRB guv
KATHMANDU, JUL 09 -
The United Kingdom’s Department for International Development (DFID) has indicated it could slash the amount it had pledged for Financial Sector Technical Assistance Project (FSTAP).
The British aid agency has started cutting down budget for a number of foreign aid projects across the world to manage funds for its commitment to the revival of the Greek economy.
Nepal Rastra Bank (NRB) Governor Yubaraj Khatiwada said on Friday the DFID indicated the possibility of cutting down a certain portion of its aid for the project aimed to reform Nepal Bank Limited (NBL), Rastriya Baniyja Bank (RBB) and re-vamping of NRB.
The World Bank and the DFID have disbursed US$ 10.53 million and US$ 7.38 as of May 8, 2008 for the financial sector reform project. The project was extended in August 2008 as Financial Sector Technical Assistance Project under which World Bank and DFID pledged US$ 3.77 million and US$ 6.34 million, respectively. It will expire on Dec. 31, 2011. Khatiwada said Nepal had been asking not to slash the aid as it had already been pledged.
“I believe DFID will not cut the budget if we can appoint chief executive officers (CEOs) in the RBB and NBL,” he told an interaction here.
Central bank officials said the DFID could cut the budget for the procurement component as NRB has failed to hire CEOs for the two banks despite five successive attempts.
As per the project paper, the DFID will provide US$ 4.9 billion for consultancy services that include US$ 1.5 million for the management contract of NBL, US$1.08 million for appointing a CEO in RBB and US$ 2.31 million for bank restructuring advisor consultancy.
A senior NRB official, however, said the World Bank may have to inject funds in case the
DFID slashes the aid as the government has given World Bank the responsibility of appointing new after consultations with the government.
Posted on: 2010-07-10 08:31
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