Finance Minister Announces Policy Reforms in Financial Sector

Kathmandu. Finance Minister Dr. Swarnim Wagle has announced significant policy reforms and new arrangements in the banking, insurance, securities, and cooperative sectors through the budget for the upcoming fiscal year 2083/84. Presenting the budget statement in a joint meeting of the Federal Parliament on Friday, he put forward plans to make the financial sector more organized, technology-friendly, and production-oriented. According to the budget statement, the Bank and Financial Institutions Act and the Banking Offenses and Punishment Act will be amended in a timely manner. The government has allocated the necessary funds to operate loan and livestock programs for the poor and small farmers through the Small Farmers Development Microfinance Financial Institution. The government has adopted a policy to ensure that the amount in the inactive fund of banks and financial institutions will be available to the legal heirs upon claim, and such amounts will be mobilized for productive work based on the prescribed legal process. To facilitate international payment systems, commercial banks and payment service providers will be able to enter into agreements with international payment networks, making the National and International Payment Aggregator and National Payment Switch effective, as mentioned in the budget. Furthermore, legal and institutional arrangements will be made for the regulation of payment aggregators. The government has arranged for the quality of loans to be assessed by a third party to enhance the effectiveness of concessional loans. Families of martyrs and the injured from the Gen Z movement will also be included as beneficiaries in this program. In addition, to increase electricity consumption within the country and control pollution, the budget has made a new arrangement whereby electrical appliances for domestic use such as washing machines, refrigerators, and vacuum cleaners can also be purchased on hire purchase. The government has also put forward new regulations for the insurance, securities, and cooperative sectors. It is mentioned in the budget that at least 20 percent of the insurance policies issued by Nepali insurance companies will have to be reinsured with the Nepal Reinsurance Company. The leadership and operation of the collective insurance fund for long-term insurance will be managed by the Nepal Reinsurance Company. Finance Minister Wagle informed that arrangements will be made to reinsure a certain portion of the risk with foreign reinsurance companies to mitigate risks.