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March 2017 Economy and Policy

Published on: 2017-03-20 11:18:19     840 times read    0  Comments
Rating Kathmandu’s Regulators

Establishing a Nepal Rating Agency would add much needed value added services to the Nepali banking fraternity.

--BY AR BHATTARAI

This rating is undertaken on the basis of available public documents and research with a detailed survey done on the basis of the "Kathmandu Rating Standards". The standards were developed after taking into account the economic and political state of Nepal and the latest regulatory developments. 

These standards deal with the prevailing legal framework, governance system, business practices, ethical standards, decision making procedure, bureaucratic system and anticipated future directions. 

The government has engaged different regulators to regulate various segments of market discipline and governance. In order to regulate and/or control different sectors a significant number of autonomous and semi-autonomous bodies have been created. Functioning and management and operation of these bodies are governed either by a self-disciplinary elected board or by a representative of the government.

The smooth functioning of these bodies depends on autonomy and accountability. Many governing bodies have sufficient authority and enjoy autonomy to regulate the operations of the market but some do not have adequate authority and autonomy. Many of them have not been able to retain and/or attract good quality staff. Some of them have low numbers of highly skilled professionals and have less autonomy for decision making and policies response.

A detailed evaluation was conducted based on the above factors and the rating was done taking as base the following parameters: political intervention, ability to regulate related fields, sound and effectiveness of the regulation or policy response, supervision and monitoring abilities, actions initiated to reduce unfair trade practices, ‘bureaucratic procedures’, time taken for decision making, general perception of these regulators by the public, critical paths for the decision making process and interviews with the related section of society. 

I have tried to assign a rating to these regulators for the first time. This is my personal view based on my research. Any person can have his or her own set of evaluations. 

The best achiever received a high number with ten being the best and one being the worst. 

Based on my evaluation, Nepali regulators scored the following:

Top Five
1.     Nepal Rastra Bank 6.7
2.     Nepal Bureau of Standard 6.1
3.     Bar Council of Nepal 5.3
4.     Civil Aviation Authority 5.0 
5.     Insurance Board 4.5

Bottom Five
1.     Nepal Telecom Authority 3.9
2.     Securities Board of Nepal 3.8
3.     Institute of Chartered Accountants of Nepal 3.5
4.     Nepal Medical Council 2.5
5.     Department of Food Technology and Quality Control 1.8

Chartered Accountant Bhattarai is a former banker. 


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