Claims of significant improvement in increasing financial access and modernization of payment system
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Rashtra Bank Governor Mahaprasad Adhikari has said that in the last five years, there has been significant improvement in the promotion of inclusivity in the financial system of Nepal, the work of increasing customer protection and financial access, and the modernization of the payment system.
On the last day of his five-year tenure, in a press conference held at Rashtra Bank Central Office, Baluwatar, the officer claimed that the bank has adopted various international best practices and made the regulation and supervision of financial institutions effective.
He says that the Rashtra Bank was repeatedly attacked during his tenure through the Ministry of Finance. Aiming at the then government's suspension on the insistence of former finance minister Janardhan Sharma, the governor officer said that he had done a good job despite the intervention of the finance ministry. "As the second year of the tenure approaches, the leadership of the Nepal Rastra Bank has been attacked and there has been a vertical interference on the autonomy of the central bank," he said, "the kind of vigilance that came from the bank's former governors, economists, eminent persons and especially the media world on the interference on the autonomy of the National Bank was unforgettable." had shrunk significantly. Without recovering from the pandemic, it faced high inflation caused by tensions between Russia and Ukraine. Despite such challenges, overall economic stability has been maintained due to the careful and timely appropriate policy arrangements taken by this bank. The external sector of the country is strong. The capital adequacy and liquidity of the financial sector are above the regulatory requirements, the interest rate remains business-friendly and the price increase after the Covid-19 is gradually decreasing, which is currently within the target of the monetary policy set by the bank, the Governor said.
Monetary policy has been modernized and liquidity management has been made more effective. According to the official, fixed deposit facilities and stabilization funds have been arranged to make the interest rate corridor more effective by making liquidity management more organized.
'Covid-19 epidemic was a challenge for the world economy. The modern world did not have to face such a challenge," he said. However, it was a big challenge to make use of the available limited resources and keep the economic system in rhythm.
In such a situation, the bank adopted some traditional and some non-traditional measures while formulating monetary policy carefully and based on facts. The official claims that such measures have helped to keep the economy in a rhythm and in a strong condition compared to the counterpart countries.
During this period there has been further consolidation in the financial sector through mergers/amalgamations and acquisitions. Unhealthy competition has been discouraged and perverse activities in the financial sector have been minimized to an extent. Significant improvements have been made in view of the indiscipline seen on both the lending and borrowing sides. A policy has been taken to mobilize the resources and means available to the banking sector in the productive sector.
The country has made significant progress in the expansion of digital payments due to the incentive arrangements taken by the bank. The investment of fintech companies, institutions related to payment services, the activity of bank financial institutions and the interest of the general public has brought a revolution in electronic payments," he said. "During this period, with the intention of facilitating the flow of foreign investment and credit, the double approval that must be obtained from this bank for foreign capital investment has been removed, while a clear, transparent and predictable arrangement has been made in relation to foreign loans." Appreciating the progress made by Nepal in the last 10 years, the official said that more work should be done to make it complete according to international standards.
