Banking sector deposits Rs 280 million in Covid-19 fund after central bank directiveAs per revised unified directives, banks and financial institutions can also contribute the fund to protect and treat their employees.
Banks and financial institutions of the country contributed around Rs 280 million to the government’s Covid-19 fund after the central bank made it mandatory for them to contribute the remaining amount of their Corporate Social Responsibility Fund into the pandemic fund.
As per the central bank’s directive, they need to set aside one percent of their net profit into the fund and they can use it in helping marginalised groups and the wellbeing of their staff. After the deadly earthquake in 2015, the central bank had made it mandatory for banks and financial institutions to create such a fund.
As the country is facing a health crisis, the central bank, through its monetary policy made it mandatory for them to contribute to fight the Covid-19 pandemic.
“The A, B, C and D class banks and financial institutions contributed around Rs280 million to the Covid-19 fund,” said Dev Kumar Dhakal, executive director at the central bank said.
Even though banks were already contributing to the Covid-19 fund at federal, provincial and local levels, it is the remaining amount in the CSR fund that they have contributed as per the central bank’s directive.
“At this moment, the biggest corporate social responsibility means to help the government to manage this health crisis,” said Dhakal.
The central bank had told them to contribute the remaining amount of the CSR fund by mid-August.
“Microfinance institutions alone had contributed around Rs35 million before we were told to deposit the remaining amount into the federal government’s Covid-19 fund,” said Basanta Lamsal, president of the Nepal Microfinance Bankers’ Association. “I am not sure about how much amount was deposited from the microfinance institutions after the central bank’s directive to hand over the remaining amount too.”
“My institution contributed around Rs1.5 million, which is more than I had in the CSR fund,” said Lamsal who runs the micro-finance institution Vijaya Laghubitta headquartered in Nawalparasi.
“Earlier, we had provided Rs200,000 each to the Covid-19 funds of the provincial government and also contributed around Rs900,000 to various local governments,” said Prakash Raj Sharma, chief executive officer of Laxmi Laghu Bitta Bittiya Sanstha which it claims has contributed around Rs2.8 million to the Covid-19 funds of federal, provincial and local governments.
As per revised unified directives, banks and financial institutions can also contribute the fund to protect and treat their employees.
They should also contribute five percent of their Corporate Social Responsibility Fund in expanding the financial literacy programmes, in building orphanage houses, housing facilities for elderly people and children protection houses, according to the central bank directives.