Guv: Nepal has been able to prevent financial crisis

KATHMANDU, SEP 18 -

Nepal has been able prevent any possible financial crisis despite a protracted political transition, Nepal Rastra Bank (NRB) Governor Yubaraj Khatiwada said on Wednesday.

Speaking at the inauguration of an interaction on corporate governance organised by the Nepal Banking Institute, he said that political and regulatory environments were fundamental factors to maintain corporate governance, and stressed the need to consider the political conflict for a long period, law and order situation, weak, and in some cases, non-existent state mechanism.

Lauding Nepal’s performance in preventing a financial crisis from appearing, the governor said that there had been instances of countries with better governance and better political stability suffering a huge financial crisis.

The governor said that stakeholders in the financial system should not be over-enthusiastic and over-criticize themselves.

Khatiwada called the central bank an important stakeholder in Nepal’s financial system as it is the regulator of the banking sector that accounts for three-fourths of the financial industry. He said that the role and regulation of the central bank, its supervision and enforcement are all important to maintain corporate governance in the financial sector.

The governor said that besides the central bank, other stakeholders including the board of directors, chief executives and employees needed to do a self-retrospection of their roles.

He stressed the need for accountability and transparency among other stakeholders too for better governance.

“Besides this, human resource policy, accounting and auditing practice, reporting standard, information technology policy, risk management measures and internal control system are also important for the purpose,” he added.

Source: The Kathmandu Post