Finance Sector Reform in Nepal - What Works, What Doesn’t
Ozaki, Mayumi | July 2014
Abstract
"Nepal is a small landlocked country with a per capita gross national income of $700 in 2012. Despite the small size of its economy, Nepal has a relatively diversified finance sector. Before reaching its current state, the finance sector went through two major reform programs. The first reform program began in 1985 when the country faced an economic crisis, which prompted the government to initiate a structural adjustment program with the International Monetary Fund. The second reform program was initiated in 2002 and was trigged by a political crisis—in particular the Maoist insurgencies in the late 1990s—which compelled the Government of Nepal to embark on broader economic reforms. International development agencies played a role in these reforms. Overall, the reform programs contributed to the finance sector’s growth and improved governance. The government decided to restructure and privatize the three major state-owned banks: Agricultural Development Bank Limited, Nepal Bank Limited, and Rastriya Banijya Bank. However, privatization of these state-owned banks has yet to be completed. Nepal Rastra Bank’s supervisory capacity has generally improved, but its independence and enforcing authority is still weak. The report identifies key success factors and constraints in Nepal’s finance sector reforms. It finds continuous donor engagement and dialogues, strengthening of the central bank’s independence, and maintenance of sound finance sector policies to be key for successful reform outcomes. "
Citation
Ozaki, Mayumi. 2014. Finance Sector Reform in Nepal - What Works, What Doesn’t. © Asian Development Bank. http://hdl.handle.net/11540/1286. License: CC BY 3.0 IGO.ISSN
2313-5867 (Print), 2313-5875 (e-ISSN)
Keywords
Economic Development
Economic Infrastructure
Economic Policies
Regional Economic Development
Microfinance Programs
Public Finance
Local Financing
Financial Stability
Financial Sector Regulation
Enterprises
Financial aid
Economies in transition
Local Finance
Local Government
Insurance Companies
Banks
Social Equity
Social responsibility of business
Accounting
Personal budgets
Cost and standard of living
Bank accounts
Credit control
Regulatory reform
Banks and banking
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Citable URI
http://hdl.handle.net/11540/1286Metadata
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