Nepal Rastra Bank has started work on the first quarterly review of this year’s monetary policy. The research department began the process after informal discussions with governor Bishwanath Paudel.
Governor Paudel has already stated that the strict rules placed on banks and financial institutions should slowly be relaxed. Because of this, officials say the upcoming review will introduce more flexible measures in several regulatory areas.
According to officials, the governor has long supported a policy of less regulation and more supervision. This approach plans to reduce unnecessary pressure on banks while keeping tight monitoring to protect financial stability. The review will follow the directions already written in point number 70 of this year’s monetary policy. It calls for using international standards, reducing extra regulatory burdens step-by-step, and making banks more responsible through risk-based supervision. A previous task force led by Dr. Rewat Bahadur Karki had also recommended easing unnecessary regulatory pressure on banks. Their suggestions will also be used in preparing the review.
The law requires the review to be completed within 45 days after the end of each trimester. NRB spokesperson Guru Prasad Paudel confirmed that the central bank will publish the review on time, likely by Mangsir 15.
The spokesperson also said that no big changes are expected. Interest rates are stable, banks have enough money to lend, inflation is low, and the capital position of financial institutions is strong. For these reasons, only small adjustments are likely.
Analysts say the private sector is struggling with low confidence after recent social unrest. They believe the central bank alone cannot solve this. They argue that the government must first ensure safety and create a trustworthy investment environment. Only then will businesses feel secure about investing their money and expecting fair returns.
