High-Level Coordination Committee Reviews Financial Sector, Decides on Key Measures

In a significant development for Nepal's financial sector, a meeting of the High-Level Coordination Committee under the chairmanship of Hon'ble Minister of Finance, Dr. Prakash Sharan Mahat, was successfully conducted today. The meeting aimed to assess the current state of the financial sector and chart a course for its enhancement. Among the attendees were the Vice President of the National Planning Commission, Dr. Min Bahadur Shrestha, and Mr. Maha Prasad Adhikari, the Governor of Nepal Rastra Bank, along with other leaders of financial sector regulatory bodies.

The meeting concluded with several crucial decisions aimed at strengthening the financial sector and promoting its efficiency. Here are the key takeaways:

1) Legal Amendments: The committee decided to expedite the process of amending key financial sector laws, including the Nepal Rastra Bank Act, the Act on Banks and Financial Institutions, and the Acts on the Nepal Securities Board. This will include a review of existing legal frameworks for establishing digital banks.

2) Reducing Financial Intermediation Costs: To lower the cost of financial intermediation, relevant agencies will immediately begin formulating policies and procedures aimed at improving the process.

3) Enhancing Regulation: The meeting emphasized the need for coordinated efforts to make the financial sector, capital market, and insurance sector more effective. Regulatory bodies will work on enhancing their capacity to achieve this goal.

4) Subsidized Loan Program Review: The effectiveness of the subsidized loan program will be reviewed based on a comprehensive study report.

5) Remittances through Formal Channels: An incentive program will be launched to encourage the use of formal channels for remittances.

6) Remittance Bond Action Plan: An action plan will be prepared for issuing a remittance bond, with a commitment to taking legal action if necessary.

7) Mobilizing the Financial Sector: The financial sector will be effectively utilized to deploy financial instruments in the productive sector. Additionally, microfinance institutions will be subject to effective loan management regulation.

8) Action Plan Preparation: To implement these decisions, relevant bodies will prepare an action plan within two weeks and submit it for discussion at the next committee meeting.

These decisions mark a significant step towards ensuring the stability and growth of Nepal's financial sector. By working together and prioritizing these measures, the committee aims to promote financial inclusion, reduce costs, and strengthen the regulatory framework, ultimately benefiting the country's economy and its people.