Governor Adhikari Emphasizes Economic Stability and Financial Reforms on NRB's 69th Anniversary
On the occasion of the 69th anniversary of the Nepal Rastra Bank, the Governor Mr. Maha Prasad Adhikari, delivered his speech which underscores the critical role of economic stability and the banking sector in driving overall economic growth and development. He expresses gratitude to various stakeholders, including the government, Ministry of Finance, banks, financial institutions, international financial organizations, private institutions, and initiatives, for their cooperation and contribution to the bank's success and the overall financial stability of the country.
Additionally, Mr. Adhikari acknowledges the current economic situation, noting improvements such as maintaining foreign exchange reserves and controlling inflation, while also highlighting challenges such as conflicts and geopolitical tensions affecting food exports and prices. He emphasizes the need for policy reforms to address these challenges and ensure sustained economic stability and development.
Similarly, he described various financial regulations and adjustments in Nepal, with a focus on green financing, risk management, and loan classifications. It introduces the Nepal Green Finance Taxonomy initiative to encourage green financing and mitigate climate-related risks, along with regulatory measures such as the Capital Adequacy Framework and Countercyclical Buffer implemented by commercial and development banks. Specific provisions are outlined for increasing the Loan to Value Ratios (LTV) for different loan categories, including real estate loans and personal residential home loans, particularly for projects approved by the government. Moreover, there are adjustments in loan classifications and provisioning to address challenges faced by financial institutions, alongside provisions for equity capital, venture capital, and compliance with National Financial Reporting Standards (NFRS).
Furthermore, the speech highlights the regulatory measures undertaken to address issues arising from irregularities in loan repayments and to support the cash flow of troubled borrowers, including the restructuring and refinancing of loans. It also mentions the categorization of loans based on risk assessment, with adjustments made to minimum loan loss provisioning ratios. Additionally, it discusses the supervisory inspections and monitoring conducted by regulatory bodies, including onsite inspections using the Supervisory Information System (SIS) to ensure compliance with regulations and to address any lapses or shortcomings identified during the inspections.
