Open Letter to Editors of Nepali Mainstream Dailies

Images of reporting of various festivals of nationalities in Nepal in mainstream paper / digital media.

A. Setopati digital newspaper of Tamang Lohsar: http://www.setopati.com/home/

B. Kantipur e - news: http://www.ekantipur.com/np/2070/10/18/full-story/383469.html

What is Engaged Buddhism?

By Kishore Sherchand

The concept of Engaged (सकृय) or Socially Engaged Buddhism is not new in a global context but it sounds may be somewhat unfamiliar to Nepalese monks and scholars. The reason behind is obvious. Nepal, although claims to be the birthplace of the historic figure Sidhartha Gautam Buddha, does not seem to have much that has had contributed to the world as a teachings of Buddhism. Buddhism has had its dazzling capacity to adopt and adjust to the environment where it went. In the present context of the expansion of Buddhism in the more elite world, it tried to seek yet another avenue of finding not only “Sit, Meditate, Realize the Three Pillars – Buddha, Dharma and Sangha” but also apply meditation and its teachings into the social, environmental, economic and political actions.”

 Donald Rothberg and Hozan Alan Senauke gave the notion that came into the Western society popularly known as “Socially Engaged Buddhism” is a Dharma practice that flows from the understanding of the complete yet complicated interdependence of all life. It is the practice of the Bodhisattva vow to save all beings. It is to know that the liberation of ourselves and the liberation of others are inseparable. It is to transform ourselves as we transform all our relationships and our larger society. It works at times from the inside out and at times from the outside in, depending on the needs and conditions. It is to see the world through the eye of the Dharma and to respond emphatically and actively with compassion.

 Buddhism so far in the lands of Buddha are basically divided into three categories or sects: Therabad (Way of the elders), original form of Buddhism mostly popular in Sri Lanka, plain India and other South East Asia; Mahayana (great vehicle) popular in East Asia China, Korea, Japan and part of Vietnam and Vajrayana form of Mahayana popular in Tibet, Himalayan region of Nepal, India, Bhutan, Mongolia, part of Eastern Russia. The fourth one coming up as the Western Form of practice composed with socially engaged, may be living room-based, more secular, may be non-monastic, more philosophically approached than the traditional lands of Buddhism. This is termed like Engaged, Socially Engaged, Humanistic or Navayana. In the Western context, I would also prefer to call it Dhyanayana (meditational).

 The Engaged Buddhism was not familiar to me until I attended a three day orientation meeting at Bhaktapur, organized by one Youth Bouddha Shangha of Nepal facilitated by International Network of Engaged Buddhists (INEB). The main teacher was an American lady. I thought, in the beginning, this notion was coined by some Westerner to practically apply in social uplifting like education, health and development as we observe in Christianity way of doing. I felt, this is a good way of serving the needy society – refers to Buddhists who are seeking ways to apply the insights from meditation practice and Dharma teachings to situations of social, political, environmental, and economic suffering and injustice.

 The first person who coined the term “Engaged Buddhism” is a Vietnamese Zen Buddhist Thich Nhat Hanh (Thay), inspired by the Humanistic Buddhism reform movement in China by Taixu and Yinshun. Finding its roots in Vietnam through the Zen Buddhist teacher Thich Nhat Hanh (They), Engaged Buddhism has grown in popularity in the West.

Precepts of Engaged Buddhism:

Zen Buddhist Thich outlined fourteen precepts in order to apply the meditation and Buddhist practices into the society as a tool of social, political, spiritual movement. This surely gives us a new and dynamic application awakening the society to uplift. This is another version of how the modern way of Buddhism parallel to much more we can visualize in Christianity, humanistic models of health, education and developmental services. The fourteen precepts outlined by Thich Nhat Hanh are summarized as follows:

1. Do not be bound to any doctrine, theory, or ideology, even Buddhist ones. Buddhist systems of thought are guiding means; they are not absolute truth.
2. Do not think the knowledge is changeless, absolute truth. Learn and practice nonattachment from views in order to be open to receive others’ viewpoints.
3. Do not force others, to adopt your views. Apply compassionate dialogue, to renounce fanaticism and narrow-mindedness.
4. Do not avoid suffering or close your eyes before suffering. Awaken yourself and others to the reality of suffering in the world.
5. Do not accumulate wealth while millions are hungry. Live simply and share time, energy, and material resources with those who are in need.
6. Do not maintain anger or hatred. Turn your attention to your breath in order to see and understand the nature of your hatred.
7. Do not lose yourself in dispersion and in your surroundings. Practice mindful breathing to come back to what is happening in the present moment.
8. Do not utter words that can create discord and cause the community to break.
9. Do not say untruthful things for the sake of personal interest or to impress people. Have the courage to speak out about situations of injustice, even when doing so may threaten your own safety.
10. Do not use the Buddhist community for personal gain or profit, or transform your community into a political party.
11. Do not live with a vocation that is harmful to humans and nature.
12. Do not kill. Do not let others kill.
13. Possess nothing that should belong to others, but prevent others from profiting from human and other species suffering.
14. Do not mistreat your body. Learn to handle it with respect. Do not look on your body as only an instrument. Preserve vital energies (sexual, breath, spirit) for the realization of the way of life.

 Engaged Buddhists:

Organizations such as the Buddhist Peace Fellowship (BPF), the International Network of Engaged Buddhists (INEB) and the Zen Peacemakers, led by Roshi Bernard Glassman are devoted to building the movement of Engaged Buddhists. Other Engaged Buddhist groups include the Benevolent Organization for Development, Health and Insight, Gaden Relief Projects, the UK’s Network of Buddhist Organizations, Fo Guang Shan, Think Sangha, Sathirakoses-NagapraDeepa Foundation and Tzu Chi. Other prominent figures in the movement include Robert Aitken Roshi, Joanna Macy, Gary Snyder, Alan Senauke, Sulak Sivaraksa, Maha Ghosananda, Sylvia Wetzel, Anthony Stultz, Diana Winston, Fleet Maull, Joan Halifax, Tara Brach, Allen Walace, and Ken Jones.

 The other one best known who followed the path of Buddhism in a socially and politically way that pertains very much to the concept and practices of Engaged Buddhism was Dr. Bhimrao Ramji Ambedkar. Baba Sahib Dr. Ambedkar, the founding father of modern Indian constitution, in defiance of hierarchical Hindu caste system that existed in India and Nepal, with his  announcement in public, followed Buddhism and converted at one time almost half a million Indians of lower Hindu caste. He is widely considered as the main figure who was responsible in bringing back Buddhism in India that was kept exiled for over 800 years. In his words, while accepting Buddhism as his religion, “I will accept and follow the teachings of Buddha. I will keep my people away from the different opinions of Hinayana and Mahayana, two religious orders. Our Buddha Dharma is a new Bouddha Dhamma, Navayana (Neo Buddhism).” (Navayana, 1956). Many Buddhist scholars like George Boeree (2002) and founder of the Buddhist Society in England (1906-1967) Christmas Humphreys, have favorably commented on Navayana coined by Dr. Ambedkar, another way of recognizing Engaged Buddhism.

The Visible Women Activists in Engaged Buddhism:

1. Ven. Ngawang Sangdrol is a young Tibetan nun and prisoner of conscience.
2. Daw Aung San Suu Kyi is the General Secretary of the National League for Democracy in Burma and has frequently been arrested and imprisoned for her non-violent beliefs.

3. Roshi Joan Jiko Halifax, A student of Ven. Thich Nhat Hanh, and a founding member of the Zen Peacemaker Order.  She is also the founder of Upaya, a Buddhist organization dedicated to education and practices that foster effective action and right livelihood
4. Roshi Sandra Jishu Angyo Holmes was the second Abbot of the Zen Community of New York. Along with her husband, Roshi Bernie Glassman, she co-founded the Zen Peacemaker Order.
5. Bell Hooks is a brilliant thinker and social critic concerned with the political implications of gender, race, and class inequities in America, and also a Buddhist practitioner in the tradition of the Vietnamese Zen master Thich Nhat Hanh.
6. Dr. Joanna Macy is an activist, ecologist and author, is one of the pioneers of “engaged Buddhism” on The Dharma of Natural Systems.
7. Helena Norberg – Hodge  is a Swedish linguist, environmental activist, and author of Ancient Futures: Learning from Ladakh — is the founder of The Ladakh Project in India and also the director of the International Society for Ecology and Culture (ISEC).
8. Sensei Enkyo Pat O’Hara is a Soto Zen Priest, a Founding Teacher of the Zen Peacemaker Order. She manages the Buddhist AIDS Network, and is deeply involved in issues of race, class, sexuality and health, homelessness and urban poverty.
9. Lesslie Williams operates the Engaged Buddhism webpage, an inspiring project with extensive links to resources on human rights and social justice. Her current Urgent Action campaign is the Campaign to ban Landmines.
10.  Master Cheng Yen is a Bhikkhuni in Taiwan who, moved by the plight of the poor, established the Buddhist Compassion Relief Tzu Chi Foundation in 1966; providing charity and medical treatment to the needy worldwide, granting treatment to all irrespective of ability to pay; also works in education and culture, international disaster relief, bone marrow donation, environmental protection, and community volunteer service.

Dimensions of Engaged Buddhism:

The areas of concerns how Engaged Buddhism can contribute to the global issues are basically globalization, consumerism, environment, community development, health, education, and sex and gender issues.

The INEB Founder Sulak Sivaraksa states, “The relentless drive by world-wide corporate entities to force their products on to the richer sectors threatens the global balance of natural resources and the lifestyle of indigenous people.”

The Western Buddhism attempts to link the crisis of consumerism with physical, psychological and spiritual materialisms that is threatening the every culture of the World. The Buddhist philosophy and its practices recommend the precept of generosity – giving up – to the needy. Generosity is the virtue that produces peace. Generosity is a practice which overcomes our acquisitiveness and self-absorption, and which benefits others. Committing to this practice may produce our greatest legacy for the twenty-first century.

With increased communication and cooperation among Buddhists around the globe, Buddhist-inspired environmentalism is also becoming manifest in national and international arenas. Kenneth Kraft in “The Greening of Buddhist Practice” states that Socially Engaged Buddhism is one of the notable developments in late twentieth-century Buddhism, and Environmental Buddhism is an important stream within this larger movement.

Also, increasingly, some of notable organizations are working how to change the life of inmates so that they can come back to their previous normal life supporting prisoners in the practice of contemplative disciplines, with emphasis on the meditation practices of the various Buddhist traditions.

Two of the few notable organizations are worthy to mention here.

1. a.    Buddhist Peace Fellowship (BPF):

One of the earliest organizations that has made a rousing (उत्साहीत) call on how the precepts of Dharma can be linked to the contemporary social, political and humanistic problems. The BPF with help from Mushim Ikeda-Nash, Maia Duerr, Roshi Joan Halifax, and Chris Wilson, supports the recent movement “Occupy Wall Street” in the following actions:

1. Interconnection.  We are moved by the interconnectedness expressed in this movement.  Occupy Wall Street is not about one environmental situation or one war, but rather about all of the systems which create suffering for all beings, and which are all related to each other.  Our spiritual practice is not just for our individual enlightenment, but to end suffering for all beings, so we are moved to address this system.
2. Ending suffering means changing the conditions of inequality. The influence of money, corporations, and banks in our U.S. political system blocks all of the human and environmental goals that BPF works towards.  Numerous Buddhist texts point out that if an individual lives in poverty it is not due to karma as a form of personal punishment, but rather that poverty exists within a web of collective causes and conditions. The Buddha also noted that the way to build a peaceful society is to ensure equitable distribution of resources.
3. The means are the ends.  We are moved by and in agreement with the nonviolent tactics of the movement.  We believe in the power of compassionate presence, of bearing witness, and of nonviolent strategies toward spiritual awakening and liberation. The people on the streets in New York, and around the country and world, are in the process of being the change they wish to see, to use Gandhi’s phrase.
4. We participate in solidarity with the 100%—with all beings.  While we want to change the situation of disparity in world, we don’t want to exile the 1% from our hearts.  Furthermore, we are aware that lumping people together, whether into the 99% or the 100%, can invisibilize people’s experiences, especially those of people of color, and the many others who bear the heaviest burdens of inequality in the U.S. and in the world.

1. b.    International Network of Engaged Buddhists (INEB):

The International Network of Engaged Buddhists (INEB) was founded in 1989 in Thailand, initiated by the Thai social, ecological and spiritual activist Ajahn Sulak Sivaraksa under the patronage of H. H. the 14th Dalai Lama, the Venerable Thich Nhat Hanh, and the Venerable Buddhadasa Bhikkhu as representatives of the three main Buddhist traditions.

 The INEB has also supported the current “Occupy Wall Street” movement that are being waged in the face of economic downturn and massive unemployment but remaining as the cradle of maximum corporate profit in the US and other Western countries.  David Roy quotes on Slavoz Zezek and Michael Stone who attempted to link the Buddhist precepts with the economic one in Buddha terminology “Awakening of”. From this presentation what can be judged is “Awakening of” by sofar Buddhist applies to individualism only. On the other hand awakening of in the movement “Occupy Wall Street” as a collective approach is to justify from Buddhist perspective.

 David Roy states that the burgeoning power of corporations became institutionalized in 1886, when the Supreme Court ruled that a private corporation is a “natural person” under the U.S. Constitution and thus entitled to all the protections of the Bill of Rights, including free speech. Ironically, this highlights the problem: as many Occupy Wall Street posters declare, corporations are not people, because they are social constructs. Obviously, incorporation (from the Latin corpus, corporis “body”) does not mean gaining a physical body. Corporations are legal fictions created by government charter, which means they are inherently indifferent to the responsibilities that people experience. A corporation cannot laugh or cry. It cannot enjoy the world or suffer with it. It is unable to feel sorry for what it has done (it may occasionally apologize, but that is public relations). Most important, a corporation cannot love. Love is realizing our interconnectedness with others and living our concern for their well-being. Love is not an emotion but an engagement with others that includes responsibility for them, a responsibility that transcends our individual self-interest. Any CEOs who try to subordinate their company’s profitability to their love for the world will lose their position, for they are not fulfilling their primary – that is, financial – responsibility to its owners, the shareholders.

 It should be reminded that the very concept of Buddhism adheres to peaceful movement but traditional way of individual awakening differs from new away of collective awakening that could be the important facet of Engaged Buddhism for justice and prosperity. At the end, Slavoz and Michael emphasizes that if we continue abusing earth, our civilization will be destroyed. Buddha attained individual awakening but now we need collective awakening as well.

 The other important issue the INEB is attempting to link authentic Buddhism into awakening of environmental issues such as global climate change that is destroying the mother earth. The forum will attempt to help connecting Buddhist environmental activists and bringing other religious activists together to address the climate change issues and resolve.

 David Roy in his paper “What’s Buddhist about Socially Engaged Buddhism” attempts to distinguish between individual Dukha, as a consequence of greed (लोभ), ill will (गलतचाहना) and delusion (झुटोआस्था) from collective Dukha in a society and explain non-duality of personal and social practices. He suggests three implications of Buddhism – the importance of personal practices, commitment to non-violence and awakening together. The practices such as Gandhian way were to liberate India from British Colony without de-humanizing the British authorities. And that is why he was so successful. Similarly, the East European peaceful protests against the Communism showed us that the elite falls when they lose the minds and hearts of the people. Avoiding use of violence is much more important because violence invites violence. The author also attempts to interpret those five precepts of Buddhism in the context of Socially Engaged Buddhism i.e. no killing, no stealing, no lying, no harmful sexual behavior (योनदुराचार) and no harmful intoxication (नशापदार्थदुराचार). Incompatibility to these precepts as the author outlines are militarization, abuse of natural resources, deception of corporate media, sexual imaging in entertainment in advertisement and many legal as well as illegal drug uses, technological devices such as mobile, walkman, internet, etc respectively. So Dukha in what is socially engaged Buddhism is promoted by Ego-self (स्वअहंमता) as well as Wego-selves (सामूहिक अहंमता) and three collective poisons of social Dukha are institutionalized (संस्थागत) greed, institutionalized ill will and institutionalized delusion.

 The hardest part of political peace protest by social and political activists in some Buddhist countries have been at the action level of “self-immolation” as seen from Vietnamese monks during Vietnam war, from Burmese monks in the uprising against Junta dictatorship and currently from the Tibetans for “Free Tibet” movement against China. However, a prominent Social Activist Sivaraksa said, “Engaged Buddhists do not allow themselves to simply be overwhelmed by their emotions and paralyzed into inaction. Rather, they are at the forefront in the struggle for human rights, for protecting our environment, and for social justice.”

The Engaged Buddhism is a new social, political and economic dimension. The world at large is confronted with many problems. The Engaged Buddhism does not advocate the use of any violent means rather through the actions of Buddha’s teachings, meditation, awakening of, etc. at every walk of life. It is a high time for Nepal confronted with political, social, cultural and economic problems, to learn something about the very concept of The Engaged or Socially Engaged Buddhism.

References:

Buddhist Peace Fellowship Staff – Occupying the Present Moment: Why BPF Supports the Occupy Movement.

David Loy – What’s Buddhist about Socially Engaged Buddhism.

David R. Loy – Waking Up from the Nightmare: Buddhist Reflections on Occupy Wall Street. International Network of Engaged Buddhists (INEB), Buddhist Peace Fellowship

Dharma Net International – Engaged Practices.

Judith Simmer-Brown – The Crisis of Consumerism.

Nishikanta Waghmare, 2007. Dr. B.R. Ambedkar’s Contribution to Buddhist Education in India. www.Countercurrents.org.

Sulak Sivaraksa – Buddhism and Non-Violence.

Thich Nhat Hanh – The Fourteen Precepts of Engaged Buddhism.

Ven. Sunyana Graef  – The Foundations of Ecology in Zen Buddhism. Religious Education. Vol. 85 Issue 1 Winter.1990.

Donald Rothberg and Hozan Alan Senauke – Turning Wheel Magazine/Summer-Fall – 2008.

Source: http://worldamity.wordpress.com/2012/07/28/engaged-buddhism-in-a-global-context/#comment-4735

Travel Cheap to Nagasaki, Japan from Seoul

Nagasaki is the capital of Nagasaki prefecture on the island of Kyushu, Japan. Under the national isolation policy of the Tokugawa shogunate, Nagasaki harbor was the only harbor to which entry of foreign ships was permitted. Even today, Nagasaki shows the influence of many cultures such as Dutch, Portuguese, and Chinese. On 9 August 1945, three days after the bombing of Hiroshima, a nuclear bomb was dropped on Nagasaki, killing a total of over 100,000 people. Six days later Japan surrendered, officially ending World War II.

From Seoul to Fukuoka: 

You can take a cheap flight from Seoul to Fukuoka. The flight takes around 1 & 1/2 hrs. I suggest, if you want to travel to Fukuoka, Nagasaki or other places, then book your e - ticket in advance. The price of ticket may be exceptionally cheap as less as US $ 100 only. Scan time and then: 

http://www.jejuair.net/jejuair/ko_EN/main/main.jsp

From Fukuoka to Nagasaki:

Bus: Highway buses from Hakata station and the Fukuoka airport international terminal are the most economical way to reach Nagasaki from Fukuoka, costing about ¥2,500 each way and taking about 2.5 hours. In Nagasaki, the buses arrive and depart from a small bus station across the road from the main train station. They depart about every 15 minutes during the day, though not all stop at the airport.

Train: JR Kyushu runs the Kamome Limited Express train service from Hakata station in Fukuoka / vice versa from Nagasaki train station once or twice every hour. The one-way ride takes about two hours and costs ¥4,330. However, if you are travelling to many places in Japan and intends to travel economically then i suggest you purchase JR PASS.

Getting around Nagasaki:

Trams ( romen densha or "chin-chin densha") connect most of Nagasaki; they run about every ten to fifteen minutes during the day. The most frequently used lines will be the red (3) and blue (1); the blue and red lines run on the same track from the northern end of Nagasaki as far as the Nagasaki train station, where they split. The blue line continues to the You-me Plaza shopping mall, and later the downtown shopping arcade. A one-way trip is ¥120 and you can get a transfer ticket (”noritsugi ken") to continue your trip, if it requires two streetcars. These tickets can only be acquired if you get off at the Tsuki Machi stop. You can save money if you're doing a lot of travel by purchasing a daily pass for the streetcars (¥500) which you can purchase at most major hotels.

Buses also run through much of Nagasaki, including places that aren't served by the streetcars.

It should be mentioned that the street cars stop running around 11 PM, and most bus service also has downtime at night. This can come as a rude awakening if you go out in Shianbashi, only to find that you have to stay until 6AM for the first running densha. For the adventurous, it takes about an hour to walk from Shianbashi to Sumiyoshi. This timeframe is heavily dependent on how fast you walk, and what kind of night out you experienced.

Lodging:

I recommend Casa Noda Hostel, NS bldg 6-1 Motofuna-machi, Nagasaki city, Nagasaki, 5 min from Nagasaki Station, tel. +81 80 4270 1418 . It is a very new and small hostel with only two dormitories, but they are creating more rooms now. If you come with more than four people you get a discount of 300 Yen. dorm room: 2300 Yen per person per night with breakfast. The owner is nice and gives very good tips about the local restaurants and temple area. Good English is spoken. Use the map on their website to find it.

Source:  http://wikitravel.org/en/Nagasaki

Understanding Dhukuti

Dhikur (in Thakali), Dhikuti or Dhukuti (in Nepali) - literally a storage box, used for valuables or food grains - The Dhukuti is a financial self-help group which originated from a system of communal food grain storage for the needy. With the onset of the market economy, it expanded quickly and became a sophisticated informal people's bank, providing capital for small businessmen as well as farmers. Its resources are solely derived from internal savings mobilization.

Thus, the Dhukuti can be defined as a Rotating Saving & Credit Association (RoSCA) in which equal amounts of money are collected from the participants in regular intervals and allocated to one member at a time. Its rotation is mostly determined by secret tender, the fund going to the lowest bidder, except at the first and last rounds of a round. Dhukuti has become a major informal financial institution for small enterprise finance in Nepal, particularly for investments in non-farm and off-farm activities. In many cases, it is the only source of credit.

In many detailed studies made on Dhukutis between 1964 and 1988, the following features were identified:

• Very common, each with 10-30 or more members
• Access is open to all, both men and women. Individual shares may also be multiple or partial.
• Cycle of rotation is annual in the case of smaller groups and semi-annual in larger groups. The turn is determined by drawing lots/bids, except in the case of the first round and last rounds.
• Books are always kept, with records of all transactions and with all signed and witnessed contracts.
• Cases of defaulting, fraud or embezzlement have remained exceedingly rare at all times.

During the past half century Dhukuti spread as informal financial institutions all over the country and became the small businessman's self-help bank (Seibel & Shrestha 1988). This was mainly due to the extension of the money economy, the increase in business opportunities, an upsurge in the demand for money and, at the same time, the lack of formal financial institutions with convenient savings deposit facilities and broad access to credit. During that process of expansion, the Dhukuti underwent two major changes: the cycle of rotation changed from annual to monthly, and fund allocation by lots was replaced by secret bidding.

The Rotating Savings and Credit Association (RoSCA) plays an important role as a financial intermediary in many parts of developing countries. They flourish in both urban and rural settings, especially where formal financial institutions seem to fail to meet the needs of a large fraction of the population. Bouman (1979), for example, estimates that, in central African countries, about 20% of household savings are accumulated in informal RoSCAs. In the South- Indian state of Tamil Nadu with a population of 62 million, the turnover in formal RoSCAs has been estimated at 100 billion Rupees, about 2.5 billion US dollars, in 2001 (Rao,2001).

In each part of the world, RoSCAs come under different names, all of them share, however, some common features. More specifically, Calomiris and Rajaraman (1998) define a RoSCA as ‘a voluntary grouping of individuals who agree to contribute financially at each of a set of uniformly-spaced dates towards the creation of a fund, which will then be allotted in accordance with some prearranged principle to each member of the group in turn’. Once a member has received a fund she/he is excluded from the allotment of future chits until the RoSCA ends.

Many empirical studies report that the funds obtained from a RoSCA are often used to purchase a lumpy good whose cost cannot be covered by a member’s current income. In this connection, a random RoSCA has the merit of allocating the full amount of the chit to one of the members each time the group meets.

Informal financial institutions (IFIs), among them the ubiquitous rotating savings and credit associations, are of ancient origin. Owned and self-managed by local people, poor and non-poor, they are self-help organizations which mobilize their own resources, cover their costs and finance their growth from their profits. With the expansion of the money economy, they have spread into new areas and grown in numbers, size and diversity; but ultimately, most have remained restricted in size, outreach and duration. There are over 20,000 informal community based organisations, such as self-help groups and rotating savings and credit associations (ROSCAs), moneylenders, traders, friends and relatives. Friends and families are the main providers of informal loans in both urban and rural areas; they provide 84.4% and 60.5% of total informal loans respectively. (Citation: MICROFINANCE INDUSTRY REPORT, Nepal, 2009 page 19) Are they best left alone, or should they be helped to upgrade their operations and integrate into the wider financial market with a modification or without a modification? This question is yet to be answered.

Statement of the Problem

"When the change outside is greater than the change inside, the end is near" - Peter Drucker. New products are crucial because the market is changing. The old trend might become new again but it never stay still. Only constant is change. Therefore, any business house in the market has to develop new market products for its survival in the market. This is possible only by modifying existing market product or by introducing a new conceptual product.

More than two decades after Nepal liberalized the banking sector and witnessed its tremendous quantitative expansion. The banking sector has contributed immensely to the Nepali economy and the Nepali people since the liberalization, as is demonstrated by the tremendous growth in deposits and lending. Not only has the access of the common people to banking grown during this intervening period, but their habit of channeling money into savings has also increased significantly. But banking seems to have become a victim of its own success, and things have now reached a tipping point. Unless there is serious reform and restructuring in the sector with new product developments, there are indications we may be headed for serious trouble in the future. Therefore, similar condition also applies to the banking sector. With the mushrooming pattern of banking sector, they do need new product concept for the market. Irrespective of the growing size of banking sector, the market is lacking of newer market products.

On the other hand, banking sector is also suffering from liquidity crisis. The year to year repeating cyclic nature of liquidity crisis has become one of the major challenge. The amount of C/D (Credit/Deposit) ratio is above the tolerable level and increasing. Such liquidity problems with Nepal's banking sector is caused by the opaqueness of most transactions, VAT evasion, under-invoicing, and the fact that many Nepalis are not in the tax net. One of the money circulations which does not come under the tax net of the state is the widely exercised unofficial practice of RoSCA in the form of Dhukuti. If this cash circulation could be diverted into the banking sector, there would be more cash available in the banking sector.

In addition, the Dhukuti schemes are being practiced unofficially because of which, on the one hand, a huge amount of money is out of the state tax bracket and on the other hand, people are unable to take legal actions against default and fraud in the absence of legal agreement. Despite the fact that it involves a higher risk of default in the absence of legal agreement, a huge amount of money is still being circulated via this sector. If the money could be diverted into the banking sector, this would have a dual effect of addressing liquidity crisis on one hand and meeting the people's aspirations and expectations on the other hand.

Beside, most of the banking products are taken as investment alternative as well. The returns of banking products are quite certain & predictable. But, the range of this investment-type banking products are in limited number. Adding new investment like banking product not only will attract new customers rather it will help to address liquidity crisis of the bank as well.

1.  Can RoSCA be introduced in the form of Dhukuti in banking sector?
2.  ­­Will this new product be able to address liquidity crisis of bank effectively?
3.  How much liquidity will it inject in the banking sector?
4.  Can Dhukuti be an investment alternative?
5.  Can each participants of Dhukuti be satisfied?

REVIEW OF LITERATURE

This chapter deals with literature review. It consists of two sections: first, conceptual review and second, review of empirical studies.
Conceptual review

Dhukuti

Dhikur (in Thakali), Dhikuti or Dhukuti (in Nepali) - literally a storage box, used for valuables or food grains - The Dhukuti is a financial self-help group which originated from a system of communal food grain storage for the needy. With the onset of the market economy, it expanded quickly and became a sophisticated informal people's bank, providing capital for small businessmen as well as farmers. Its resources are solely derived from internal savings mobilization.
Thus, the Dhukuti can be defined as a Rotating Saving & Credit Association (RoSCA) in which equal amounts of money are collected from the participants in regular intervals and allocated to one member at a time. Its rotation is mostly determined by secret tender, the fund going to the lowest bidder, except at the first and last rounds of a round. Dhukuti has become a major informal financial institution for small enterprise finance in Nepal, particularly for investments in non-farm and off-farm activities. In many cases, it is the only source of credit.
In many detailed studies made on Dhukutis between 1964 and 1988, the following features were identified:

• Very common, each with 10-30 or more members
• Access is open to all, both men and women. Individual shares may also be multiple or partial.
• Cycle of rotation is annual in the case of smaller groups and semi-annual in larger groups. The turn is determined by drawing lots/bids, except in the case of the first round and last rounds.
• Books are always kept, with records of all transactions and with all signed and witnessed contracts.
• Cases of defaulting, fraud or embezzlement have remained exceedingly rare at all times.

During the past half century Dhukuti spread as informal financial institutions all over the country and became the small businessman's self-help bank (Seibel & Shrestha 1988). This was mainly due to the extension of the money economy, the increase in business opportunities, an upsurge in the demand for money and, at the same time, the lack of formal financial institutions with convenient savings deposit facilities and broad access to credit. During that process of expansion, the Dhukuti underwent two major changes: the cycle of rotation changed from annual to monthly, and fund allocation by lots was replaced by secret bidding.
Rotating Saving & Credit Association (RoSCA)

A Rotating Savings and Credit Association or ROSCA is a group of individuals who agree to meet for a defined period of time in order to save and borrow together. ROSCAs are the poor man's bank, where money is not idle for long but changes hands rapidly, satisfying both consumption and production needs.
Meetings can be regular or tied to seasonal cash flow cycles in rural communities. Each member contributes the same amount at each meeting, and one member takes the whole sum once. As a result, each member is able to access a larger sum of money during the life of the ROSCA, and use it for whatever purpose she or he wishes. This method of saving is a popular alternative to the risks of saving at home, where family and relatives may demand access to savings.
Every transaction is seen by every member during the meetings. Since no money has to be retained inside the group, no records have to be kept. These characteristics make the system a model of transparency and simplicity that is well adapted to communities with low levels of literacy and weak systems for protecting collective property rights.
The system further reduces the risk to members because it is time limited—typically lasting no more than 6 months. This reduces the size of the loss, should someone take funds early and not pay back.
ROSCAs have different names across the world. They are called “chit funds”, “chits” or “committees” in India, in West Africa and the Caribbean, whereas in Nepal they are called “Dhukuti” or “dhikur”. In India, ROSCAs are widespread. Originating in South-India (Bouman, 1995b; 1999; Rakodi and Lloyd-Jones 2000) the ancient Indian ROSCA fund was already in existence before the advent of British Rule. They were originally based on grain contributions, but later on they changed into a monetary ”chitty” (Bouman 1995b). Only migrants who had worked in South India, or who knew colleagues with working experience from there were aware of ROSCAs. Originating in South India, ROSCAs are still today more common in South India than in the North.
The literature distinguishes in general three different types of RoSCAs, depending on how the pot is allocated. The pot may be allocated randomly (random RoSCAs), through a bidding process (bidding RoSCAs) or according to pre-determined order (deterministic RoSCAs).
Chitty or Chit Funds as a ROSCA practice in India

According to Primitive civilizations, a book written by Edith Jemima Simcox, the ‘Malabar Kuri’ system existed from ancient Dravidian times and is somewhat similar to the systems in China. In China it developed to what is popularly known today as the Chinese lottery. Dr NM Nampoothiri in his work 'Legacy of Nila' refers that the Village Banking system known as Kuri has its origins from the ‘Kaavu tattakam’ social group system. ‘Kavu tattakam’ refers to the territorial jurisdiction of a ‘kaavu’ or temple to a specific area. There were many such Thattakams and all ‘Kaavu Tattakams’ were finally linked to Zamorin’s Tirunavaya Mamankam. There are usually four kinds of chits. The 'Simple Kuri', the 'Lelam Kuri or Auction Chit', the 'Sahaya Chit' and the 'Prize Chit or Lottery' where a certain amount of gambling is involved. In Travancore, the usual term used is 'Chitty' from where 'Chit' comes whereas 'Kuri' or 'Panam Payattu' is the name employed in Cochin and Malabar regions. Chit fund become very popular in the 19th century when ruler of erstwhile Cochin state, Raja Rama Varma, gave a loan to a Syrian Christian traders, keeping a certain portion of it to himself for administrative and other expenses. Later, to manage the increasing numbers of those seeking loans, he ordered a cast of lots and gave the accumulated amount to those who drew the lot on the principle of equity. Gradually the practice spread to other parts of the world including Myanmar and Sri Lanka. But the modern operations of chit funds started between 1830 and 1835, when the Chaldean Syrian church in Thrissur started Kuries under its name and issued passbooks to subscribers as evidence of enrolment. Another version of the origin of Chit fund is linked with Portuguese missionaries from China, who visited Muziris (Kodungalloor) for evangelization and established a seminary at Vypeencotta village in 1577. They reportedly encouraged promotion of chit fund in Kodungaloor.
Indian Acts

Chit funds in India are governed by various state or central laws. Organised chit fund schemes are required to register with the Registrar or Firms, Societies and Chits.

• Union Government - Chit Funds Act 1982 (Except the State of Jammu and Kashmir)
• Kerala - Kerala Chitties Act 1975
• Tamil Nadu - Tamil Nadu Chit Funds Act, 1961
• Karnataka: The Chit Funds (Karnataka) Rules, 1983
• Andhra Pradesh - The Andhra Pradesh Chit Funds Act, 1971
• New Delhi- The Chit Funds Act,1982 and Delhi Chit Funds Rules, 2007
• Maharashtra - Maharashtra Chit Fund Act 1975

Commercial ROSCA funds

While originating in the informal economy, ROSCAs have become a big business in urban settings. In some major cities of India, large ROSCA fund companies run as many as 10,000 auction ROSCAs simultaneously. The steady growth of commercial (auction) ROSCA funds has induced Indian legislators to pass a specific law that regulates this part of the financial sector.
The Government has also set up a Chit Fund Department, to control the activities of the Chit Fund Companies and to publicise registered Chit Fund companies and disqualified chit fund companies.
Customers of commercial ROSCA funds usually don’t interact with other members of the ROSCA group to which they belong (Klonner, 2002). Auction ROSCAs are an exception in this respect. If members do not interact, the organiser or chairman has a bigger responsibility to enforce payments. Yet in commercial ROSCA funds, the company collects the contributions, and pays the winner of a ROSCA. Members are not even aware of defaults or late payments by other participants (Klonner 2002, pp. 2-3).
In Nepal, “Dhukuti” or “committee” is the most common form of Rotating Credit Association. A Dhukuti has the same basic principle as a ROSCA. They are found in different degrees of sophistication. ROSCAs and Dhukutis were originally set up for the poorer members of a community. Yet they have evolved into a largely commercialized and regulated system of small-enterprise finance. At the same time, informal Dhukutis still exist.

Research Gap

Since Dhukuti is being practices unofficially, it seems that there are limited articles, journals & research conducted about ROSCA practice in Nepal. Available research reports are also outdated, focused to some part of the country and not conducted rigorously. Contrary to this, our neighboring country India has made a long stride on this regard. They have established adequate legal & institutional framework for giving a formal way for ROSCA practice as Chit Fund and has conducted very rigorous studies on this instance. Despite the fact that Dhukuti is gaining popularity among Nepalese community, the state has failed to main-streamline Dhukuti. No rigorous study has been made at the very moment. Therefore, at this moment, a rigorous study has become urgent to formalize and institutionalize Dhukuti practice.

Source:
http://nepal-pokhra.blogspot.kr/2013/10/dhukuti-as-new-banking-product.html

Happy New Year 2014

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