Government Unveils Ambitious Plans to Revitalize Financial Sectors in Nepal

The Nepalese government has outlined comprehensive measures aimed at rejuvenating the country’s banking, financial, microfinance, and cooperative sectors. Presented by President Ramchandra Paudel before a joint session of the Federal Parliament, the policies and programs for the fiscal year 2081-82 BS (2024-25) underscore the government’s unwavering commitment to address longstanding challenges and foster sustainable growth.

Key highlights of the government’s agenda include:

Regulatory Overhaul: The government pledges to introduce a slew of legal and policy-level reforms to tackle the root causes of issues plaguing financial institutions. Emphasis will be placed on enhancing regulation, supervision, and fostering healthy competition within the sector.

Support for Microfinance and Cooperatives: Recognizing the vital role of microfinance institutions and cooperatives, the government promises initiatives such as loan re-tabulation, restructuring, and policy adjustments to meet evolving needs. Cooperatives will be mandated to integrate into a centralized management system, with incentives for mergers among savings and credit cooperatives.

Industrial Revitalization: The government aims to pool fragmented capital to drive major industrial projects forward. Private investment companies will be engaged to revive dormant industries, including the Gorakhkali Rubber Industry, Butwal Spinning Mills, and Hetauda Garment Factory.

Equitable Revenue Distribution: Ensuring fair and balanced revenue distribution is a top priority. Grants will be allocated based on objective criteria, while integrated laws will be formulated to govern the mobilization and sharing of natural resources, investments, and profits among government tiers, thereby resolving related disputes.

Stimulating Investment Climate: The government pledges to create an environment conducive to domestic and foreign investment, with streamlined approval processes and enhanced predictability through automated digital systems. Efforts will focus on simplifying procedures for securing foreign loans and other mixed forms of investment.

Country Rating Initiative: Nepal’s country rating will be established in the upcoming fiscal year, signaling the government’s commitment to transparency and attracting international investment.

These bold initiatives underscore the government’s proactive stance towards economic revitalization and inclusive development, with a strong emphasis on regulatory reforms, investment facilitation, and equitable resource distribution.