Wider reforms including risk-based regulation to rural loan recommended for banking sector
Summary
Nepal Rastra Bank's taskforce recommends wide-ranging reforms for the banking sector, including risk-based regulation, increased rural loans, and improved supervision to address economic challenges and liquidity issues.
Key Points
- Nepal Rastra Bank formed a taskforce led by Dr Rewat Bahadur Karki to recommend comprehensive banking reforms.
- The report emphasizes risk-based supervision and categorizing banks into three classes for regulation.
- It recommends increasing credit flow to education, health, transport, and green sectors and creating integrated banking cost mechanisms.
- The taskforce advocates separate regulation for microfinance and non-banking institutions and suggests advancing mergers and improvements to financial market oversight.
