CBFIN welcomes Monetary Policy, Calls for effective implementation of reform measures

KATHMANDU: The Confederation of Banks and Financial Institutions Nepal (CBFIN) has welcomed the monetary policy for the upcoming fiscal year, describing it as a balanced and forward-looking framework that prioritizes price stability, financial sector resilience, regulatory simplification and overall macroeconomic stability.

In a statement issued on Friday, the umbrella body representing banks and financial institutions said the monetary policy departs from traditional approaches and introduces policy measures that send a positive signal to the financial system and the private sector.

CBFIN noted that the central bank has adopted a pragmatic approach by retaining key monetary policy instruments unchanged while introducing reforms aimed at improving the efficiency of the banking sector and supporting economic recovery.

According to the organization, the Nepal Rastra Bank’s decision to maintain the policy rate, standing deposit facility rate, bank rate, cash reserve ratio (CRR), statutory liquidity ratio (SLR) and standing liquidity facility (SLF) will help preserve macroeconomic stability while making the business environment more predictable.

The confederation also praised the central bank’s initiatives to address the growing stock of non-performing loans in sick industries and facilitate the revival of stressed credit, stating that these measures would support both borrowers and financial institutions.

CBFIN further welcomed several structural reforms announced in the monetary policy, particularly those aimed at modernizing banking operations and reducing operating costs.

“The provisions to make the process of opening and closing bank branches more flexible, promote the digitalization of financial services to reduce banks’ operating expenses, encourage commercial banks to invest in foreign government securities to facilitate liquidity management arising from foreign currency purchases, and undertake sterilized intervention during foreign exchange purchases are visionary and positive policy measures,” the confederation said in the statement.

The organization said these initiatives demonstrate a long-term vision for strengthening Nepal’s financial system while enabling banks to operate more efficiently in an increasingly digital and competitive environment.

According to CBFIN, the emphasis on digital transformation, regulatory flexibility and prudent liquidity management reflects the central bank’s recognition of the evolving challenges facing the banking industry.

The confederation also expressed optimism that the monetary policy would contribute to restoring confidence in the financial sector and provide greater certainty for businesses and investors.

While welcoming the policy in its entirety, CBFIN stressed that its effectiveness will ultimately depend on timely and consistent implementation.

The organization urged the Nepal Rastra Bank and other concerned authorities to ensure that the announced reform measures are translated into action so that the intended benefits can reach the banking sector, businesses and the broader economy.

“Several visionary programs have been incorporated into the monetary policy. Their successful implementation will be crucial to achieving the desired outcomes,” CBFIN said, emphasizing that effective execution will determine the policy’s overall impact on Nepal’s financial sector and economic growth.