The Government of Nepal has initiated the process of amending the Nepal Rastra Bank Act, 2002 to introduce provisions related to digital currency and enhance governance in the financial sector. The Ministry of Finance has issued a public notice asking stakeholders to submit suggestions on the draft amendments by the end of this week, as part of efforts to modernize the central bank’s legal framework.
Under the proposed changes, the government plans to recognize digital currency as legal tender and put in place measures to stop destroyed, mutilated, or illegal digital currencies from circulating again. The amendment also seeks to make the central bank more autonomous, transparent, and accountable by aligning it with international practices. It includes revisions to improve the monetary policy framework, introduce a risk-based supervision system, and strengthen financial stability. The draft bill would require the central bank to publish its monetary policy within 15 days of the start of each fiscal year and more clearly define its roles as a macro-prudential regulator, lender of last resort, and authority responsible for dealing with troubled banks.
In addition to new provisions for digital currencies, the amendment aims to modernize accounting standards, strengthen internal audit systems at financial institutions, and clarify procedures for appointing and removing the governor, deputy governors, and board directors. It also proposes restructuring the NRB board and forming an audit committee with defined rules for remuneration. Provisions are included to maintain price stability as the central bank’s primary objective while ensuring the overall stability of the banking and financial sector. The draft also touches on banks’ capital requirements, reserve funds, financial development funds, and the establishment of special reserve funds.
Officials say the amendment is intended to clarify the central bank’s mandate in light of the growing importance of digital currencies, green finance, emerging financial risks, and the need for improved governance of the financial sector. This proposed revision, known as the Nepal Rastra Bank (Third Amendment) Bill, 2082, would be the tenth time the Act has been amended and reflects a broader push to adapt Nepal’s financial regulatory framework to contemporary challenges.
A related proposal under consideration would also provide legal recognition to digital banks operating purely through digital platforms and integrate them into the regulatory system.
