Govt to develop strategy to reform financial sector, including share market

ShareSansar, October 28:

The government has formed a high-level steering committee to develop strategy for strengthen and stability of the country’s financial sector.

The 11-member committee led by Finance Minister Shankar Koirala is mandated to devise the strategy and give recommendations to reform the financial sector, including share and commodity markets.

The budget for the current fiscal year 2070/71 had envisaged such a committee.

“Financial sector at the international level has come a long way,” an official with the finance ministry said. “We can no longer afford to lag behind. Hence the strategy will help us keep tab with the world.”

He further said that special financial strategy was needed also to boost people’s confidence in the financial sector.

Noting that informal trading was in the rise due to complicated procedures related to the financial sector, he added that the committee will devise strategy to “simplify” the sector.

He further informed that the high-level committee is also entrusted with the responsibility to formulate a plan to reform and promote the share market.

According to government sources, the high-level committee is likely to allow the Non-resident Nepalis to invest in the stock market.

It may be noted here that the then finance minister Surendra Pandey had come up with a provision to let the NRNs to directly invest in the stock market, but the provision is yet to be enforced.

Many investors are also demanding privatization of the Nepal Stock Exchange Limited (NEPSE), the only share market in the country, and a long-term strategy to strengthen the share market, which has not been able to fair well ever since its establishment in 1992.

The steering committee will also devise a strategy to reform the insurance sector, the finance ministry sources informed.Billions of rupees get drained out of the country each year in the pretext of re-insurance, though the government is yet to decide on establishing a reinsurance company in the country.