Central bank to push for mergers
KATHMANDU, OCT 2:
The central bank will be pushing for mergers among financial institutions in its Five Year Strategic Plan that is being finalised.
“The central bank will emphasise on the mergers of financial institutions as one of its core agendas in the five year strategic plan,” said spokesperson for the central bank Bhaskar Mani Gyanwali. The five year plan will also be framed to assure monetary stability and financial solidity in the economy along with strengthening the institutional capacity of the financial sector regulator.
Lately, Nepal Rastra Bank has taken stance to propel merger among the financial institutions as the consolidation has emerged as the most viable solution in the present situation. Mergers are supposed to be the effective measure to control the growing numbers of financial institutions that has given rise to unhealthy competition among the mushrooming banks and financial institutions.
“The plan will provide a primary policy for the way to implement merger in next five years,” said Gyanwali. Though both fiscal and monetary authority have tried to provide incentive to opt for mergers, the stakeholders are not content with the waiver of registration fee of merged entities.
The Plan — that is the second one — will continue the basic premise of the first five year strategic plan that will help creating sound economic environment that fosters sustainable economic growth of the economy in general and financial industry in particular.
Strengthening the ability to supervise and monitor the financial institutions will also take a significant part of the plan as the financial sector is being plagued by consecutive failures of financial institutions lately. In the present global economic scenario post-2008 recession brought on primarily by the failures of large scale commercial banks in US, the central banks’ role has to be stronger so that the any shortcoming can be detected within time and remedied.
“The plan will help NRB to be more efficient and effective by following best norms, standards and practices to avert any disaster in the financial sector,” said NRB’s spokesperson.
It will define the responsibilities and goals of central bank from 2011 to 2016 on the annual basis. The strategic plan will be the guide in achieving NRB’s core responsibilities such as maintaining price, external sector, and financial sector stability as per its governing act -NRB Act 2002.
“The first strategic plan had led to modernisation and automation of the central bank,” he said. The plan has focused to build capacity of central bank and train more manpower and restructures departments. However, mushrooming banks and financial institutions and lack of manpower at the central bank that could supervise and monitor them led to the failure of many of the banks and financial institutions in the recent past.
Source: THT
The central bank will be pushing for mergers among financial institutions in its Five Year Strategic Plan that is being finalised.
“The central bank will emphasise on the mergers of financial institutions as one of its core agendas in the five year strategic plan,” said spokesperson for the central bank Bhaskar Mani Gyanwali. The five year plan will also be framed to assure monetary stability and financial solidity in the economy along with strengthening the institutional capacity of the financial sector regulator.
Lately, Nepal Rastra Bank has taken stance to propel merger among the financial institutions as the consolidation has emerged as the most viable solution in the present situation. Mergers are supposed to be the effective measure to control the growing numbers of financial institutions that has given rise to unhealthy competition among the mushrooming banks and financial institutions.
“The plan will provide a primary policy for the way to implement merger in next five years,” said Gyanwali. Though both fiscal and monetary authority have tried to provide incentive to opt for mergers, the stakeholders are not content with the waiver of registration fee of merged entities.
The Plan — that is the second one — will continue the basic premise of the first five year strategic plan that will help creating sound economic environment that fosters sustainable economic growth of the economy in general and financial industry in particular.
Strengthening the ability to supervise and monitor the financial institutions will also take a significant part of the plan as the financial sector is being plagued by consecutive failures of financial institutions lately. In the present global economic scenario post-2008 recession brought on primarily by the failures of large scale commercial banks in US, the central banks’ role has to be stronger so that the any shortcoming can be detected within time and remedied.
“The plan will help NRB to be more efficient and effective by following best norms, standards and practices to avert any disaster in the financial sector,” said NRB’s spokesperson.
It will define the responsibilities and goals of central bank from 2011 to 2016 on the annual basis. The strategic plan will be the guide in achieving NRB’s core responsibilities such as maintaining price, external sector, and financial sector stability as per its governing act -NRB Act 2002.
“The first strategic plan had led to modernisation and automation of the central bank,” he said. The plan has focused to build capacity of central bank and train more manpower and restructures departments. However, mushrooming banks and financial institutions and lack of manpower at the central bank that could supervise and monitor them led to the failure of many of the banks and financial institutions in the recent past.
Source: THT
