Nepal Rastra Bank has started preparing a draft of financial sector development strategy to further promote financial inclusion, modernise payment and settlement system, improve debt recovery environment, adopt best practices for accounting and auditing, and strengthen regulatory and supervisory structure.
The central bank is preparing the strategy based on a request made by the Ministry of Finance (MoF). “We hope the document will be ready within mid-July, based on which various reforms will be introduced in the banking sector,” said head of the Financial Sector Management Division at the MoF Krishna Prasad Devkota.
The strategy, which is expected to be in force for five years from the date of its launch, consists of seven pillars — financial sector development, financial access and inclusion, financial sector stability, financial infrastructure, governance, enabling environment and capacity development.
The main objective of the strategy is to have a competitive, efficient, stable and inclusive financial sector that contributes to broad based economic growth and ensures parallel growth of the insurance sector, cooperatives, capital market and non-banking financial institutions.
To achieve these objectives, the document will include strategies on increasing the outreach of financial services to rural areas and low-income groups ‘by creating a viable and effective microfinance system’.
Although Nepal has around 250 commercial banks, development banks, finance companies and wholesale microfinance lenders, central bank is still not happy with the progress made in financial inclusion.
This had led NRB governor Dr Yubaraj Khatiwada to call for formulation of a financial sector development strategy that caters to inclusive growth.
“Access to bank accounts does not necessarily ensure inclusive growth; access to credit and other financial services is more important,” he had said during the 49th Southeast Asian Central Bank Governors’ Conference held in Kathmandu, in November.
He then suggested tightening the noose around the banking sector citing ‘the financial sector, if left alone to the free market, may leave a large section of society out of financial services and may heighten inequality by adversely affecting the quality of economic growth’.
It is, thus, being said that the MoF and NRB are pushing for creation of the latest financial sector development strategy in line with comments made by Dr Khatiwada during the governors’ conference.
But apart from financial inclusion, the document will also include strategies to strengthen regulatory and supervisory structure, modernise payment and settlement system and promote good governance by adopting best practices for accounting and auditing.
The document will also include measures to strengthen debt recovery environment, strengthen the central bank’s infrastructure, promote consumer financing literacy and develop the capacity of various institutions with the help of firms like National Banking Training Institute.
source: the himalayan times,26 jan 2014
LINK
The central bank is preparing the strategy based on a request made by the Ministry of Finance (MoF). “We hope the document will be ready within mid-July, based on which various reforms will be introduced in the banking sector,” said head of the Financial Sector Management Division at the MoF Krishna Prasad Devkota.
The strategy, which is expected to be in force for five years from the date of its launch, consists of seven pillars — financial sector development, financial access and inclusion, financial sector stability, financial infrastructure, governance, enabling environment and capacity development.
The main objective of the strategy is to have a competitive, efficient, stable and inclusive financial sector that contributes to broad based economic growth and ensures parallel growth of the insurance sector, cooperatives, capital market and non-banking financial institutions.
To achieve these objectives, the document will include strategies on increasing the outreach of financial services to rural areas and low-income groups ‘by creating a viable and effective microfinance system’.
Although Nepal has around 250 commercial banks, development banks, finance companies and wholesale microfinance lenders, central bank is still not happy with the progress made in financial inclusion.
This had led NRB governor Dr Yubaraj Khatiwada to call for formulation of a financial sector development strategy that caters to inclusive growth.
“Access to bank accounts does not necessarily ensure inclusive growth; access to credit and other financial services is more important,” he had said during the 49th Southeast Asian Central Bank Governors’ Conference held in Kathmandu, in November.
He then suggested tightening the noose around the banking sector citing ‘the financial sector, if left alone to the free market, may leave a large section of society out of financial services and may heighten inequality by adversely affecting the quality of economic growth’.
It is, thus, being said that the MoF and NRB are pushing for creation of the latest financial sector development strategy in line with comments made by Dr Khatiwada during the governors’ conference.
But apart from financial inclusion, the document will also include strategies to strengthen regulatory and supervisory structure, modernise payment and settlement system and promote good governance by adopting best practices for accounting and auditing.
The document will also include measures to strengthen debt recovery environment, strengthen the central bank’s infrastructure, promote consumer financing literacy and develop the capacity of various institutions with the help of firms like National Banking Training Institute.
source: the himalayan times,26 jan 2014
LINK
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