Why the capital market would be bullish in FY 2070/71Govt, NRB’s interventions sending positive signal

ShareSansar, July 17

The government and Nepal Rastra Bank have been taking several initiatives to regulate and strengthen banks and financial institutions.

The unchecked mushrooming of BFIs in the country and a spate of unfortunate events involving them was corroding public trust in finance institutions.

But a more proactive stance by the government and, more importantly, the NRB has helped in risk reduction, thereby, bolstering public confidence in the BFIs and preventing capital flight.

Moves like encouraging mergers through incentives, injecting funds in the government owned banks like Ratsriya Banijya Bank and Nepal Bank to revive their position and the decision to divest government shares in Agricultural Development Bank to make way for foreign investment are welcome initiatives that will go a long way in creating positive climate for the overall economy.

The government decision to transform Nepal Industrial Development Bank into Infrastructure Development Bank is an indication that it is committed to ensure availability of funds for development projects and finance institutions.

These initiatives are bound to create an investment friendly climate and also help maintain a stable liquidity situation in the market, which is a good news for investors and entrepreneurs who are always looking for funds at affordable interest rate.