Kathmandu, June 19: Governor of the Nepal Rastra Bank, Dr Biswonath Paudel, argued that the central bank of the country should be enabled with authority so as to make the banks and financial institutions robust and efficient.
He said the central bank should be endowed with the special and decisive rights to enable its role.
At a meeting of the Finance Committee under the House of Representatives, he pitched for a legal basis with authority to the central bank to make immediate decisions for depositor protection and financial stability.
Governor Paudel informed that drafts to amend six spectacular laws, including the Nepal Rastra Bank Act, Banking and Financial Institutions Act, Banking Offences and Punishment Act, Financial Consumer Protection and Payment and Settlement Act, have been prepared and submitted to the Ministry of Finance.
Highlighting that Nepal has over 22 billion dollars in foreign exchange reserves, he cautioned that even a slight decrease in US interest rates could cause significant loss.
Paudel suggested instituting a ‘Sovereign Wealth Fund’ to reduce risk and opt for safe investment options.
Although agricultural loans have increased from 2.5 trillion to 7.1 trillion rupees, assessing their real utilization is necessary, he argued.
He expressed the commitment that the upcoming monetary policy will be presented in tandem with the government’s budget and fiscal policies.
On the occasion, lawmakers asked the reasons for slack on demand for loan despite positive provisions in the monetary policy.
The lawmakers were also concerned about the role the central bank should play to boost investment in productive industries. #nepal #rss
