KATHMANDU, May 29: Those leaving for foreign employment will now be required to open bank accounts before flying abroad.
“The new requirement aims at channelizing the flow of remittances into the country through formal channel,” Minister for Finance Krishna Bahadur Mahara said, presenting the budget for Fiscal Year 2017/18 at the parliament on Monday. “Arrangements will be made toward making it mandatory for aspiring migrant workers to open a bank account before going for foreign employment. They will send the remittances to their own bank account.”
He also said that the government will encourage migrant workers to invest their hard-earned money in productive sectors including ‘remit hydro’.
Though the country received a total of Rs 665 billion in remittances through formal channel in Fiscal Year 2015/16, it is estimated that many Nepalis abroad send their earnings through informal channels like Hundi.
While the government has been introducing measures to encourage the use of formal channel for remittances, such efforts have not become much effective, according to observers.
In the budget speech for the current Fiscal Year 2016/17, the government had announced 25 percent discount on registration fee of land and housing units bought from cash remitted through formal channel.
Mahara also said that the government will provide skill training and capital at subsidized interest rates to youth to promote self-employment. Labor sector will receive a total of Rs 1.14 billion in budget in the upcoming fiscal year, according to Mahara.
The government has continued its plan to distribute the social security allowances through banking channel in the new fiscal year as well. While the government has been distributing such allowances through banking channel in some districts, the plan to hand over cash through the banking channel has not fully materialized due to absence of bank and financial institutions in many remote places. The government has allocated Rs 36 billion to distribute social security allowances to elderly people, single women, Dalit and disabled, among others.
AT LEAST ONE BANK
BRANCH IN EACH LOCAL UNIT
In order to increase people’s access to finance, the government has said that it will make necessary arrangement for opening branch office of at least one commercial bank in each local unit. “The campaign ‘bank account for all Nepalis’ started in this fiscal year will be effectively implemented in the coming fiscal year as well,” said Mahara.
The government will encourage banks to provide branchless banking, Internet banking and mobile wallet, among other technology-based financial services, according to Mahara.
Similarly, the government has given continuity to the scheme of providing agro loans at subsidized interest rate of 5 percent.
SALARY FROM BANK ACCOUNT
Salary and payments made from the government fund will be channelized through bank account of respective individuals or organizations, according to the budget speech. Similarly, the government also plans to get the revenue from e-payment and make international payment through e-payment after getting e-gateway for international transactions.
INFRA BANK AGAIN!
The plan of opening an infrastructure development bank has featured on almost all budget speeches over the past decade. But there has not been any substantial progress toward establishing such bank. The government has said that it would complete all work for establishing an infrastructure development bank in the upcoming fiscal year. As the amendment to BAFIA has paved legal way for the formation of infrastructure bank, the chance of such bank getting established in the new fiscal is high, say experts.