Popular News
·

By Dipesh Ghimire

Currency : History and Current Situation

Currency : History and Current Situation

What is Currency?

Currency is a medium of exchange that plays a vital role in the trading of goods and services. Initially, the barter system was used for exchanges, but to make life more convenient, coin and paper money were developed. Today, digital currency and cryptocurrencies are increasingly taking their place.

Evolution of Currency

  • Coins: In the early stages, coins made of precious metals were in circulation.

  • Paper Money: In the 13th century, Kublai Khan introduced paper notes in China, which were considered as legal tender guaranteed by the state.

  • Plastic Currency: In 1966, Visa and MasterCard introduced debit/credit cards, making transactions safer and more convenient compared to banknotes.

  • Digital Currency: Digital currency has been replacing physical money, where e-money is used over the Internet and must be authorized by central banks or monetary authorities.

Digital and Crypto Currency

  • Digital Currency: Electronic money that is controlled by a central bank or monetary authority.

  • Cryptocurrency: A type of digital currency that is secured by cryptography and operates on blockchain technology.

Central Bank Digital Currency (CBDC)

  • CBDC: A digital currency issued by a central bank, based on blockchain technology, with government recognition for formal transactions.

  • Advantages: Technological efficiency, reduced risks, prevention of illegal activities, and financial security.

  • Disadvantages: Potential disruption to the banking system, centralization issues, and possible hindrance to economic growth.

Changing Trends in Currency Usage

People are increasingly using digital currencies, debit/credit cards, and mobile wallets instead of physical currency. The use of QR codes for payments indicates a shift towards digitalization in society.

Conclusion

Technology is a double-edged sword. If regulated and controlled in time, it can strengthen the economy. Neighboring countries like India and China have already adopted digital currency. Nepal should also take this seriously and regulate it effectively to increase its participation in the global economy.

Related Blogs

Capitalist Economy: Characteristics, Strengths, and Weaknesses
Popular News

2 min read

Capitalist Economy: Characteristics, Strengths, and Weaknesses

A capitalist economy is an economic system where the means of production, such as land, factories, and labor, are privately owned. In this system, government intervention is minimal, and economic activities are primarily driven by private ownership. In a capitalist economy, the following activities are carried out autonomously: Determination of sectors and timing for investment. Selection of goods and services to be produced. Determination of the market for sale.

Dipesh Ghimire

·

4 Sep, 2024

Amendment to the Banks and Financial Institutions Act (BAFIA) 2073: Reforms and New Provisions in the Banking Sector
Popular News

4 min read

Amendment to the Banks and Financial Institutions Act (BAFIA) 2073: Reforms and New Provisions in the Banking Sector

To further strengthen and organize Nepal's banking sector, a proposal to amend the Banks and Financial Institutions Act (BAFIA) 2073 is currently under consideration in the House of Representatives. The Ministry of Finance has pushed the BAFIA amendment bill forward to implement the latest practices developed in national and international financial systems, enhance financial security, and adapt to technological changes. This bill seeks to bring four major changes to the banking sector. 1. Proposal to Separate Bankers and Entrepreneurs One of the main challenges in Nepal's banking sector is the relationship between bank investors and entrepreneurs, and the associated risks. The bill proposes that any individual holding more than 1% of the paid-up capital of any bank should not be allowed to borrow from other banks or financial institutions. The current limit is 2%. This provision aims to tighten controls on investors in the banking sector and reduce the possibility of uncontrolled investments. Under Section 52 of the BAFIA bill, it is proposed that banks and financial institutions should not provide any loans or facilities to affiliated persons or those with significant ownership in any bank. This provision is expected to help minimize financial risks in the banking sector. However, stakeholders have expressed concerns that this provision might negatively impact the investment climate due to investments made by businesses in the banks.

Dipesh Ghimire

·

2 Sep, 2024

IPO Pipeline Status: A Closer Look at the Upcoming Public Offerings
Popular News

3 min read

IPO Pipeline Status: A Closer Look at the Upcoming Public Offerings

Nepal's capital market is set to witness a wave of Initial Public Offerings (IPOs) as several companies across diverse sectors prepare to go public. According to the latest data from SEBON, a total of 26 companies are in the IPO pipeline, collectively seeking to raise NPR 26.81 billion by issuing approximately 160.61 million shares. This influx of IPOs is a reflection of the growing interest among businesses to tap into public capital, and it provides a diverse range of investment opportunities for investors.

Dipesh Ghimire

·

28 Aug, 2024

Impact and Strategies When Interest Rates on Savings and Term Deposits Decrease
Economy

2 min read

Impact and Strategies When Interest Rates on Savings and Term Deposits Decrease

With the start of the fiscal year 2081/82, all banks and financial institutions have reduced the interest rates on savings and term deposit accounts. Commercial banks have announced an average interest rate of 3% on regular savings accounts and 6% on term deposit accounts. According to recent data published by Nepal Rastra Bank, consumer inflation is averaging at 5%. This means that something which cost NPR 100 yesterday now costs NPR 105. In this situation, a 3% interest on savings cannot keep up with inflation. Such a move by the banks discourages savers. Observing the decisions made by banks to reduce interest rates over the past 5-6 months, there is a possibility that interest rates may drop even further.

Dipesh Ghimire

·

20 Jul, 2024

Challenges In Development Efforts, Social Justice And Prosperity
Popular News

5 min read

Challenges In Development Efforts, Social Justice And Prosperity

The proposed budget for the fiscal year 80/81 was NPR 1751 billion, but it was revised down to NPR 1530 billion. Similarly, the proposed budget for the fiscal year 81/82 of NPR 1860 billion was passed by the parliament but faces implementation challenges. It is concerning that, despite a proposed foreign grant of NPR 50 billion for the fiscal year 80/81, only NPR 3 billion was received by the end of Jestha. We have failed to gain credibility abroad and have not been able to raise other projected resources. This issue is serious. The inability to mobilize expected revenue, to spend capital expenditure, to implement proposed domestic and foreign loans, and the increasing burden of debt repayment are challenges to our journey towards prosperity. Today, we will discuss the country's economy and development issues. The socialist-oriented governance system mentioned in Nepal's existing constitution is fundamentally liberal, open, and competitive in character. However, there are implementation problems despite the provisions in the constitution. We have analyzed the challenges seen in development efforts.

Dipesh Ghimire

·

10 Jul, 2024

Significant Decline in Profit for Reliance Spinning Mills
Popular News

2 min read

Significant Decline in Profit for Reliance Spinning Mills

Reliance Spinning Mills Limited reported a significant decline in net profit for the third quarter, falling to NPR 26.3 million from NPR 927.8 million in the previous year's same period. This drop is attributed to a 32% reduction in trade volume and a 50% increase in financial expenses. Additionally, other income fell to NPR 21.4 million from NPR 37.4 million. In response, the company announced an IPO targeted at Nepali workers abroad, issuing 115,596 shares priced at NPR 820.80 each, from Ashad 27 to Shrawan 10. This move aims to attract investment and stabilize the company's financial position.

Dipesh Ghimire

·

7 Jul, 2024

Central Bank's Monetary Policy Amidst Political Changes
Popular News

2 min read

Central Bank's Monetary Policy Amidst Political Changes

As Nepal's central bank prepares the monetary policy for the upcoming fiscal year, the country's political landscape has shifted. Following an agreement between the two major parties, Congress and UML, to form a new coalition, the government led by Pushpa Kamal Dahal (Prachanda) faces a crisis. Prime Minister Prachanda has announced that he will seek a vote of confidence, which, according to the constitution, must be taken within a month.

Dipesh Ghimire

·

5 Jul, 2024

GBBL's Financial Trends: Stability Amid Economic Fluctuations
Popular News

6 min read

GBBL's Financial Trends: Stability Amid Economic Fluctuations

Garima Bikas Bank Limited (GBBL) reported an EPS of Rs. 16.04 for Q3 2080/2081, indicating stable earnings despite economic challenges. The NPL ratio increased slightly to 2.97%, signaling loan quality issues. Networth per Share showed a positive trend, reaching Rs. 148.55. However, ROE declined to 10.8%, and distributable profit per share fell to Rs. 1.8, reflecting profitability challenges. GBBL must focus on enhancing profitability, improving operational efficiency, and making strategic investments to address these financial issues and sustain future growth. Stakeholders will closely monitor GBBL's efforts to improve financial performance in the coming quarters.

Dipesh Ghimire

·

1 Jul, 2024

EDBL Faces Significant Financial Challenges: Key Insights from Q3 2080/2081
Popular News

7 min read

EDBL Faces Significant Financial Challenges: Key Insights from Q3 2080/2081

Excel Development Bank Ltd. (EDBL) has reported a sharp decline in its Basic Earnings per Share (EPS) to -4.3 in Q3 2080/2081, highlighting financial struggles. Despite a slight improvement in its Non-Performing Loan (NPL) ratio to 7.3%, and stable Networth per Share at Rs. 151.59, the Return on Equity (ROE) dropped to 0%, indicating severe profitability issues. Distributable Profit per Share showed a minor recovery to -6.65. EDBL must focus on cost-cutting, operational efficiency, and new revenue streams to navigate these challenges and restore financial stability in the upcoming quarters.

Dipesh Ghimire

·

1 Jul, 2024

HBL's Fluctuating EPS and Rising NPLs Highlight Mixed Performance
Popular News

7 min read

HBL's Fluctuating EPS and Rising NPLs Highlight Mixed Performance

HBL's financial metrics over five years reveal significant fluctuations in EPS and Distributable Profit per Share, indicating variable profitability. Rising Non-Performing Loans signal increasing credit risks. Despite challenges, HBL shows consistent growth in Networth per Share and recent stabilization in Return on Equity, highlighting its resilience and potential for future improvement.

Writer Content

·

21 Jun, 2024

Nepal Bank Limited (NBL): Addressing the Downward Trends in EPS, NPL, Net Worth, ROE, and Distributable Profit
Popular News

8 min read

Nepal Bank Limited (NBL): Addressing the Downward Trends in EPS, NPL, Net Worth, ROE, and Distributable Profit

Nepal Bank Limited (NBL) faces significant financial challenges, evidenced by declining EPS, rising NPLs, fluctuating net worth, reduced ROE, and negative distributable profit. To recover, NBL must enhance risk management, improve operational efficiency, diversify revenue streams, and strengthen loan recovery processes to ensure sustainable growth and restore investor confidence.

Writer Content

·

21 Jun, 2024

Navigating Financial Fluctuations: SBL’s Journey of Resilience and Recovery Over Five Fiscal Years
Popular News

10 min read

Navigating Financial Fluctuations: SBL’s Journey of Resilience and Recovery Over Five Fiscal Years

SBL's financial performance over five years highlights significant fluctuations in EPS, NPL ratio, net worth per share, ROE, and distributable profit per share. This journey reflects periods of growth, challenges, and recovery, underscoring the bank's resilience, strategic adaptations, and proactive measures to maintain financial stability and shareholder value.

Writer Content

·

21 Jun, 2024

SANIMA Bank's Financial Health: Analyzing Trends in EPS, NPL Ratios, Networth, ROE, and Distributable Profits
Popular News

6 min read

SANIMA Bank's Financial Health: Analyzing Trends in EPS, NPL Ratios, Networth, ROE, and Distributable Profits

SANIMA Bank's financial metrics reveal a decline in EPS, fluctuating NPL ratios, stable Networth per Share, declining ROE, and variable Distributable Profits over five years. These trends indicate challenges in profitability and operational efficiency, highlighting the need for strategic adjustments to improve financial health and sustain growth.

Writer Content

·

21 Jun, 2024

Navigating Financial Fluctuations: ADBL’s Journey Through Volatile Earnings, NPL Ratios, Networth, ROE, and Distributable Profits
Popular News

9 min read

Navigating Financial Fluctuations: ADBL’s Journey Through Volatile Earnings, NPL Ratios, Networth, ROE, and Distributable Profits

ADBL's financial reports reveal fluctuating earnings per share, non-performing loan ratios, net worth per share, return on equity, and distributable profit per share over the past five quarters. These variations highlight the bank's operational challenges and resilience. Strategic efforts are required to stabilize and grow financial performance, ensuring investor confidence and long-term profitability.

Writer Content

·

20 Jun, 2024

SBI Financial Analysis: Navigating EPS, NPL, Networth, ROE, and Distributable Profit Trends
Popular News

9 min read

SBI Financial Analysis: Navigating EPS, NPL, Networth, ROE, and Distributable Profit Trends

SBI's recent financial analysis reveals fluctuating EPS, a rising NPL ratio, stable Networth per Share, declining ROE, and decreasing Distributable Profit per Share. These trends highlight both challenges and resilience, indicating a need for strategic measures to enhance profitability, manage risks, and sustain investor confidence in a volatile economic environment.

Writer Content

·

20 Jun, 2024