Finance Minister Prakash Sharan Mahat has said that if the financial institutions function conscientiously and regulate themselves, the country’s economy will move on the path of healthy competition.
Speaking at a social dialogue programme on the challenges, solutions and future direction of Nepal’s financial sector organised by the Financial Institute Employees Union (FIEUN), National Committee on Tuesday, Finance Minister Mahat said that the association was formed to make the members responsible and conscientious. He stressed the importance of healthy competition in the financial sector.
He expressed his pleasure for the growth of the financial sector and the transparency developed over time owing to the changes in technology compared to other sectors.
Addressing the programme, the finance minister anticipated that banks and financial institutions (BFIs) will adopt international standards and prioritise the rights and safety of the consumers. He said, ‘Despite the growth of the banking sector, the banks that are in trouble have been improved with the support from Nepal Rastra Bank (NRB). He also stressed the need for improving the Agricultural Development Bank. He said it is necessary to move the financial sector forward as a model as this sector has the confidence to restore immediately.
Mahat mentioned that there were some problems in microfinance and cooperatives and said that the budget for the next fiscal year has proposed to establish a body to bring cooperatives under the regulatory framework. He expressed commitment to implementing it soon.
The minister informed that consumer price inflation was decreasing. He added, “It is good to remain below 7%. Our goal is to bring it to 6.5% next year.”
“Although the central bank was worried that the monetary policy would lead to inflation problems, I think that the latest index will help to ease the monetary policy.” Stating that the goal of monetary policy is not only to control inflation but also to stabilise and improve the economy as a whole, he added that monetary policy will address these issues at the beginning of the next fiscal year.” He also suggested that the banking sector should find a way to solve the problems from its level.
“There are some problems in the economy as bankers are also the industrialists in the country, unlike many other countries. The situation is that the capital accumulated in the bank is invested in its own industry.” He hoped that there will be a change in the investment structure and that the capital will be flown to medium and small investors. He expressed his confidence that the financial sector and the central bank would pay attention to the investment.
