Kathmandu. The government has agreed in principle to add more right shares to Nepal Reinsurance Company, which is owned by the Government of Nepal. The decision was taken at a meeting of the Council of Ministers on Tuesday.
Nepal Reinsurance Company has not been able to issue right shares for a long time as the government has not decided to increase its investment.
With this decision of the government, it will be easier for Nepal Reinsurance Company to achieve the target of reaching the minimum paid-up capital (Rs 20 billion) set by the Nepal Insurance Authority.
It is believed that the financial base of the company will be further strengthened with the in-principle approval of the government to add capital. This will greatly enhance the risk bearing capacity of the company and take the credibility of the company to a new height in the international and domestic markets.
Economists say that the expansion of the capacity of domestic reinsurance companies will help in reducing the risk of big infrastructure, hydropower and industrial projects in the country and will also reduce the premium amount going abroad.
This decision of the government will prove to be an important milestone for the company, which is under pressure to raise the paid-up capital as per the regulatory directives of the Insurance Authority. Now more details about its formal implementation and modality of share investment are expected to come.
The meeting of the Council of Ministers has also taken other important decisions. The meeting has decided to accept a concessional loan of 285 million US dollars and a grant assistance of 20 million US dollars for road improvement from the Asian Development Bank (ADB) on the proposal of the Ministry of Finance.
The meeting also decided to include nano fertilizer, biostimulants and organic and organic fertilizers to be commercially produced and sold in the list of essential materials and to approve the ‘Fertilizer Control Order, 2083’.
Similarly, the meeting decided to give permission to a high-level delegation to participate in the 31st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP1) to be held in Antalya, Turkey from November 9, 2008.
The government has decided to give permission to publish a notice in the Nepal Gazette extending the deadline for submitting an application for the allotment of land to mid-October 2085 and the period for finalizing the action after allotting such land till Ashad 2086.
The meeting also decided to recommend to the President to issue the Ordinance Drafted to amend the Press Council Act-2048 BS and the Ordinance Designed to amend some Nepal Acts including Culture, Tourism and Civil Aviation.
