Publication: Nepal : Financial Sector Study
Date
2002-10-16
ISSN
Published
2002-10-16
Author(s)
World Bank
Abstract
Although financial institutions have
proliferated, the Nepalese people have not yet reaped the
potential gains of the government's efforts to
liberalize and reform the financial sector. There are four
main reasons for this: excessive government involvement in
the sector, a weak central bank, a poor banking environment,
and a lack of adequate banking services for the poor. The
financial sector also faces other issues that impede its
development such as a poorly functioning credit bureau,
risky finance companies, a ceiling on foreign ownership,
limited financial services, poor accounting standards, and
limited use of information technology. In November 2000 the
government issued a paper outlining its proposed financial
sector reform program for the medium term, one which touches
on all the major issues and provides sufficient basis for
undertaking far-reaching reforms. While the government has
committed to withdrawing from the sector as owner and
operator, this study makes recommendations for making the
government's strategy fully implementable.
Recommendations center on five important principles:
Withdrawing the government from ownership of financial
institutions. Significantly strengthening the central bank
to make it a fully professional institution. Restructuring
the Asian Development Bank of Nepal and closing the Nepal
Industrial Development Corporation. And creating an
appropriate environment for establishing a sound financial sector.
Citation
“World Bank. 2002. Nepal : Financial Sector Study. © Washington, DC. http://openknowledge.worldbank.org/handle/10986/15337 License: CC BY 3.0 IGO.”