Govt preparing 5-yr strategy for financial sector

KATHMANDU, DEC 18 -

The government is preparing a development strategy for the financial sector which will guide all its plans and programmes for the next five years.

According to the Finance Ministry, this first ever strategy will include banks and financial institutions (BFIs), insurance companies, micro finance institutions including cooperatives, contractual savings institutions like the Employees Provident Fund and the capital market.

The government has formed a bevy of committees to work on the strategy. The High-Level Financial Sector Coordination Committee, which is headed by the finance minister, has in turn created a steering committee and a technical committee.

The steering committee is led by the finance minister and consists of the vice-chairman of the National Planning Commission (NPC), governor of Nepal Rastra Bank (NRB), chief economic advisor at the Finance Ministry, chairmen of the Securities Board of Nepal and the Insurance Board, president of the Nepal Economic Association, former NPC vice-chairman Posh Raj Pandey, finance secretary and the chief of the financial sector management division.

Meanwhile, the technical committee is led by NRB’s senior deputy governor and consists of another deputy governor, chief of the financial sector management division at the Finance Ministry and representatives from the Department of Cooperatives, Insurance Board and Sebon. The steering committee will monitor and supervise the preparation process while the technical committee will prepare the draft, according to the Finance Ministry. NRB’s Senior Deputy Governor Gopal Kafle said that the technical committee would start work from this week by forming sub-committees to look into the concerned sectors. “The sub-committees will first prepare a strategy of the concerned areas and we will compile them into one and hold discussions with the stakeholders of different sectors in various places before submitting the final report to the steering committee,” he said. The technical committee has been mandated to complete the task by mid-April.

Kafle said that the technical committee would also study the guidance provided by the budget,

periodic plans prepared by the National Planning Commission and the monetary policy to prepare the draft.

The budget for the current fiscal year states that a financial sector development  strategy will be prepared to ensure financial stability, increase financial access, help speedy economic growth through the development of the financial sector and strengthen banks and financial institutions, the capital market and the insurance sector.

The approach paper for the Three-Year Interim Plan (2013-16) has aimed at maintaining financial stability, expanding access of people to the financial sector and expanding economic activities by using financial means and establishing a secure payment system to build confidence among general customers.  

Regarding the development of the capital market, the approach paper has mentioned expanding the inclusion of the non-financial sector as it is presently dominated by the financial sector.

Similarly, the approach paper has said that insurance services will be expanded to rural areas and measures will be taken to secure the benefits of the insured. “Besides development of these sectors, the strategy will also recommend measures to tackles wrong practices in the sector,” said Kafle.

Source: The Kathmand Post