Nepal’s banking sector dismisses rumors, confirms sound financial health

KATHMANDU: Amid recent rumors questioning the financial stability of several banks and financial institutions (BFIs), the Confederation of Banks and Financial Institutions Nepal (CBFIN) issued a press statement on Sunday to dispel concerns and assure the public about the robust health of the sector.

The CBFIN expressed its dismay over rumors spread by vested interest individuals and groups, emphasizing that BFIs have strictly adhered to policies and directives enforced by regulatory bodies. The press release highlighted the continuous scrutiny of BFIs by relevant authorities and the implementation of legal frameworks aimed at enhancing transparency and strength within the sector.

The CBFIN specifically pointed to the Bank and Financial Institution Act 2017 as well as the regular supervision and inspection conducted by the Nepal Rastra Bank (NRB) in accordance with international standards.

The monitoring of key measures such as capital adequacy ratio, liquidity ratio, CD ratio, and cash reserve ratio by the central bank were cited as fundamental policy tools for ensuring the smooth functioning of BFIs.

Furthermore, the CBFIN underscored the NRB’s commitment to maintaining the ‘Deposit and Credit Guarantee Funds,’ a protective measure ensuring the safety of bank deposits up to Rs 500,000.

In the press release, the umbrella organization for BFIs reassured the public that the sector is entirely free from risks affecting the welfare of customers. As of mid-January, BFIs have successfully collected deposits equivalent to 113.93 percent of the country’s GDP, with lending reaching 94.47 percent of the GDP.

The CBFIN highlighted the extensive reach of BFIs, providing financial services through a network of 6,441 branches across the nation. The statement aims to instill confidence in the public regarding the stability and reliability of Nepal’s banking sector.

Fiscal Nepal |
Monday February 19, 2024, 10:17:43 AM |

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