KATHMANDU, APR 29 -
Nepal Rastra Bank (NRB) Governor Yubaraj Khatiwada said on Monday that
the central bank had adopted a zero tolerance policy against financial
crime.
Misdeeds in the financial sector have swelled in recent years along
with an increase in the number of financial institutions. Several
companies have become crisis-ridden as a result of the transgressions of
their operators, many of whom have landed in jail for embezzling public
deposits.
Governor Khatiwada said that the regulatory body was working on reforms
in the financial sector to ensure that it runs efficiently and in a
transparent manner.
The central bank has recently taken measures requiring banks and
financial institutions (BFIs) to provide greater disclosure. It is also
planning to introduce a new NRB Act enabling it to liquidate
crisis-ridden BFIs and revamp the Bank and Financial Institution Act to
give greater power to the central bank.
Speaking at a programme organised by the Nepal Rastra Bank Employees’
Association to mark its silver jubilee, Khatiwada said NRB had been
facing lots of challenges in the process of reforming the financial
sector.
“However, NRB has adopted the policy of maintaining a solid footing in
the present situation. A time will come when it will have to look
forward and not remain in its present position,” he said.
Lauding the role of the trade union in improving NRB, the governor
stressed the need to strengthen the central bank too. “Unless the
regulator keeps itself upgraded with the changing times, the functioning
of the entire financial sector cannot be improved.”
Meanwhile, a majority of the speakers at the programme criticised the
uneven pattern of the loan portfolios maintained by BFIs with most of
them limiting their lending in urban areas. Due to this trend, most
people in rural areas are still deprived of the opportunity of
benefiting from financial services, they said.
Similarly, CPN-UML Chairman Jhala Nath Khanal said the role of fiscal,
financial and monetary policies were vital during social transitions
like the present one in order to maintain stability. “NRB now needs to
focus on improving the economic indicators of the rural economy,” he
added.
Leaders of the employees’ union stressed the need to develop a
financial inclusion modality to give access to the poor in the financial
system. “Needy people have been compelled to pay high interest rates
for loans, and such a situation should end,” they said.
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