NRB to monitor EPF, regulate CIT

The government on Wednesday decided to hand over the responsibility of monitoring Employees Provident Fund (EPF) and regulating Citizens' Investment Trust (CIT) to Nepal Rastra Bank (NRB). Wednesday's Cabinet meeting took the decision to this effect. The central bank now onwards will monitor EPF and regulate CIT.The decision came following the central bank's initiative and willingness to regulate both the institutions.

NRB on Dec. 9 had communicated to the Ministry of Finance (MoF) stating it was ready to regulate EPF and CIT in response to the ministry's call some four months ago that NRB regulate both the institutions. Though EPF and CIT both have huge resource mobilisation, both the institutions were self-regulated. EPF has mobilised about Rs. 80 billion and CIT about Rs. 16 billion.

According to EPF, about 50 percent of its money has gone to contributors, 35 percent is in fixed deposits, 8 percent in government bonds and 5 percent in project loans. CIT holds deposits of general public and government employees. It provides certain benefits to the public by investing the money in corporate shares, debentures and government securities.

Since law doesn't allow the central bank with the right to regulate EPF, the government has decided EPF only to be monitored by it. "Our main concern was whether the government's decision would be as per the law," said Ramesh Bhattarai, Administrator of EPF. "Today's cabinet decision shows we need not worry." The government had made a provision in the budget two years ago about letting the central bank regulate these two institutions, but was yet to materialise. An MoF official said that the proposal went to the Cabinet but was cancelled. Meanwhile, the Cabinet also decided to form a committee to recommend the new governor under the convernership of Finance Minister Surendra Pandey. However, consensus could not be forged among the committee members.

According to the Section 15 of Nepal Rastra Bank Act 2002, finance minister will be the convener of the committee. As per the Act, the three-member committee will recommend three names to the Cabinet. Tenure of Bhattarai ends in January.
Source:eKantipur