PAC directs ministry, NRB to submit probe report
KATHMANDU, AUG 13 -
Following reports of bribery in the printing of polymer notes nine years ago, the parliamentary Public Accounts Committee (PAC) on Friday directed the Finance Ministry and Nepal Rastra Bank (NRB) to submit their investigation report that they have kept secret.
A probe carried out by the Australian central bank, Reserve Bank of Australia, confirmed bribe was offered by its subsidiary—Note Printing Australia (NPA)—to Nepali officials, as reported by Australian newspaper ‘The Sydney Morning Herald’ on Aug 10.
The report also created ripples in Nepal as the central bank had stopped printing polymer notes due to inferior quality and low acceptance. “We have directed the ministry and NRB to submit the report within three days,” PAC Chairman Ram Krishna Yadav said.
The central bank had carried out the probe after it was informed of the bribery via an unnamed email in 2007. However, it kept the investigation secret.
The Commission for Investigation of Abuse of Authority (CIAA) had also received a similar email. The CIAA has said it will also investigate the issue. “We have decided to launch a probe into this issue,” said Ishwori Poudel, the anti-graft body’s spokesperson, making it clear that no official complaints were lodged at the CIAA at that time and there was no question of discontinuing the investigation as reported in the media.
While awarding the contract of printing 100 million 10-rupee notes in 2002, NPA reportedly bribed Nepali politicians and NRB officials. The notes were printed in two installments and brought into circulation. Given the inferior quality of the notes and low acceptance among the public, printing of the notes has been stopped since then.
“The inferior quality of the notes suggests irregularities,” said an NRB source. “The currency management department, general service department, board and Cabinet are involved in taking decisions on note printing,” the source added.
A former NRB official who is aware of the decision said the decision to print the notes in the low denomination was driven by ill intention as such notes are printed to avoid possibile counterfeiting. “However, usually, notes in larger denominations are counterfeited,” said the official. “It seems officials concerned were guided by ill intention.” The polymer notes were first printed when Lawmaker Tilak Rawal was the governor of NRB. The first installment of the notes were circulated during his tenure and the second installment was brought after former governor Bijaya Nath Bhattarai assumed office.
However, Rawal denied any wrongdoing. “The decision to print the notes in the denomination of Rs 10 was taken to save the notes from being worn out faster, as this note changes hands frequently,” he said. “There is no point of suspecting wrongdoing due to low denomination of the notes as even Thailand and Malaysia got their notes in low denominations printed in polymer,” said Rawal.
According to the Australian media report based on the Austrian central bank’s findings, Nepali officials were bribed from the commission payment to NPA agents to secure the banknote printing contract. NPA recently sacked its Nepali agent Himalaya Pandey.
There had also been diplomatic influences to make the deal a success. Rawal recalled that Australian ambassador Crispin Conroy was very much active in making the deal happen. “He met me several times for the purpose which I think is a general practice of economic diplomacy,” said Rawal. Sources said Conroy had also met Finance Ministry officials to lobby for the printing of the notes.
On February 12, 2002, NRB had called a 35-day global tender for printing 10-rupee polymer notes. NRB paid 2.5-fold more than the amount it was spending to print paper notes. “Due to limited competition, the rate remained higher,” said a source in knowledge of the issue.
Source: Kantipur
Following reports of bribery in the printing of polymer notes nine years ago, the parliamentary Public Accounts Committee (PAC) on Friday directed the Finance Ministry and Nepal Rastra Bank (NRB) to submit their investigation report that they have kept secret.
A probe carried out by the Australian central bank, Reserve Bank of Australia, confirmed bribe was offered by its subsidiary—Note Printing Australia (NPA)—to Nepali officials, as reported by Australian newspaper ‘The Sydney Morning Herald’ on Aug 10.
The report also created ripples in Nepal as the central bank had stopped printing polymer notes due to inferior quality and low acceptance. “We have directed the ministry and NRB to submit the report within three days,” PAC Chairman Ram Krishna Yadav said.
The central bank had carried out the probe after it was informed of the bribery via an unnamed email in 2007. However, it kept the investigation secret.
The Commission for Investigation of Abuse of Authority (CIAA) had also received a similar email. The CIAA has said it will also investigate the issue. “We have decided to launch a probe into this issue,” said Ishwori Poudel, the anti-graft body’s spokesperson, making it clear that no official complaints were lodged at the CIAA at that time and there was no question of discontinuing the investigation as reported in the media.
While awarding the contract of printing 100 million 10-rupee notes in 2002, NPA reportedly bribed Nepali politicians and NRB officials. The notes were printed in two installments and brought into circulation. Given the inferior quality of the notes and low acceptance among the public, printing of the notes has been stopped since then.
“The inferior quality of the notes suggests irregularities,” said an NRB source. “The currency management department, general service department, board and Cabinet are involved in taking decisions on note printing,” the source added.
A former NRB official who is aware of the decision said the decision to print the notes in the low denomination was driven by ill intention as such notes are printed to avoid possibile counterfeiting. “However, usually, notes in larger denominations are counterfeited,” said the official. “It seems officials concerned were guided by ill intention.” The polymer notes were first printed when Lawmaker Tilak Rawal was the governor of NRB. The first installment of the notes were circulated during his tenure and the second installment was brought after former governor Bijaya Nath Bhattarai assumed office.
However, Rawal denied any wrongdoing. “The decision to print the notes in the denomination of Rs 10 was taken to save the notes from being worn out faster, as this note changes hands frequently,” he said. “There is no point of suspecting wrongdoing due to low denomination of the notes as even Thailand and Malaysia got their notes in low denominations printed in polymer,” said Rawal.
According to the Australian media report based on the Austrian central bank’s findings, Nepali officials were bribed from the commission payment to NPA agents to secure the banknote printing contract. NPA recently sacked its Nepali agent Himalaya Pandey.
There had also been diplomatic influences to make the deal a success. Rawal recalled that Australian ambassador Crispin Conroy was very much active in making the deal happen. “He met me several times for the purpose which I think is a general practice of economic diplomacy,” said Rawal. Sources said Conroy had also met Finance Ministry officials to lobby for the printing of the notes.
On February 12, 2002, NRB had called a 35-day global tender for printing 10-rupee polymer notes. NRB paid 2.5-fold more than the amount it was spending to print paper notes. “Due to limited competition, the rate remained higher,” said a source in knowledge of the issue.
Source: Kantipur
