Many BFI board members lack financial literacy: NRB Governor
KATHMANDU, Feb 4:
Nepal Rastra Bank (NRB) Governor Yuba Raj Khatiwada has said there is a need to provide financial literacy trainings to ´upper level´ officials of banking industry and not just general public.
He also revealed that many board members of banks and financial institutions (BFIs) come to complain him saying that they jumped into the banking business without knowing its norms and basic things and now want to exit it. “More than 100 board members have been sharing similar concerns with me. It shows that they do not have much idea about banking norms,” Khatiwada said, underscoring the need to raise awareness among board members along with general public on financial literacy.
“Some board members of micro finance institutions come to me and ask what this micro finance is all about. When I tell them that how are you formulating policies at your company to extend loans to the deprived community, they say their CEO is doing all these things and they just take briefings from him. This is the situation of financial literacy at the policy level,” said Khatiwada.
NRB Governor Khatiwada was speaking at a launch of ´Financial Literacy Campaign´ organized by Rastriya Banijya Bank Ltd (RBBL) in Kathmandu on Tuesday.
“Apart from general level of awareness among public, we, at the higher level, also do not know some terminologies of the financial market. We also need to be aware in this regard,” Khatiwada added. “Service seekers as well as banking service providers and operators of the banks should be financially literate.”
Governor Khatiwada also said that financial literacy campaign should focus on raising awareness among people about the importance of insurance and capital market. “You should also teach the people about the importance of insurance and capital market as this integrated efforts can help to assist in ensuring financial stability in the country,” he added.
According to Governor Khatiwada, such campaign is instrumental in ensuring financial access along with increasing financial access to unbanked people. “Depositors, who do not understand the importance of insuring their deposit up to Rs 200,000, can quickly run to the bank if that bank plunges into problem. It might create crisis in the banking sector," he said, adding that campaigns like this can help in ensuring financial stability.
RBBL launches financial literacy campaign
Rastriya Banijya Bank Ltd (RBBL) has started financial literacy campaign to raise awareness among general public about the importance of having a bank account, saving habit and investment opportunities, among others.
The state-owned bank launched the campaign amid a ceremony held in Kathmandu on Tuesday.
In the first phase of the campaign, RBBL will organize various interactions and discussions in Dhanusha, Kaski and Nawalaparasi for school children, community leaders and general public.
Nepal Rastra Bank (NRB) Governor Yuba Raj Khatiwada launched ´Sukha Ko Baato´ -- a short novel to teach children about banking habit -- penned by bank´s Public Relation Officer Mukunda Aryal and a TVC featuring popular folk singer Pashupati Sharma.
According to the bank, these materials will be disseminated to the public through various programs.
The bank also said that it was celebrating ´ATM Card Week´ in a bid to make people aware about ATM card and various risks associated with its use.
Speaking at the program, RBBL CEO Krishna Raj Sharma said that the bank decided to start financial literacy campaign realizing the fact that banking business thrives only when client and bank both become strong. "Banking business is all about the agreement between two sides -- client and bank. If a client defaults on its loans, this is going to affect the bank. So we need to make our clients financially disciplined and maintain financial stability," said Sharma. "Banks should teach clients on ways to choose the right bank, compare interest rates of various banks, and various products that benefits them, among others."
Speaking at the program, RBBL Chairman Rewat Bahadur Karki said that the financial literacy program was necessary for urban clients so that they can use banking services prudently. Such awareness is needed to inculcate banking habits in rural population, he added.
Source: Republica
