WB Approves Credit To Strengthen Nepal’s Financial Sector

The World Bank has approved a US$ 30 million credit to help Nepal accelerate its financial sector reform program to reduce vulnerability of the banking sector and increase its transparency. 'The Government of Nepal’s medium-term program for the financial sector focuses on reforms designed to place the financial sector on a sound foundation for the future,' states a press statement by the bank. According to the bank, the Nepal Financial Sector Stability Credit will support six main policy areas: (i) formulation of a financial sector development strategy; (ii) restructuring of Nepal Bank Ltd and Rastriya Banijya Bank; (iii) assessment of the condition of Class A, B and C financial institutions and potential restructuring; (iv) strengthening institutional arrangements to support the bank restructuring process; (v) strengthening the legal and regulatory framework for effective bank resolution; and (vi) increasing the transparency of the financial system. 

The credit carries a 0.75% service charge, a 10 year grace period and a maturity of 40 years.