Financial mismanagement blocks prosperity «

Financial mismanagement blocks prosperity

Governor of Nepal Rastra Bank (NRB) Dr. Chiranjibi Nepal said that the poor state of financial management system at individual households, institutions and even higher levels is the main roadblock for the financial reforms in Nepal. While giving his speech as Chief Guest in the conference organized by Growth Sellers Pvt. Ltd. he said, “If only people learn to manage finances, the country will be prosperous as the market for investment in manufacturing has a very good opportunity.”
Dr. Nepal further said, “For a country like Nepal, bringing the financial illiterate in the formal banking system is the biggest challenge.” He stressed on the need to learn and execute a level of dedication such that Nepal raises its productivity and becomes self-sufficient in the economy. According to him, investment in IT is crucial and must be high in the banking sector.
The conference is organized by Growth Sellers Pvt. Ltd. with a theme ‘Emerging issues in financial system’. In the program, Dr. Gunakar Bhatta, Executive Director of NRB presented his keynote session on Macroeconomic perspective of Banking. Dr. Bhatta said, “The interest rate in the last one and a half years has remained stable. The real deposit rate has been positive means domestic saving is high which is positive for capital accumulation.”
According to him, the economic growth rate in last two years is high due to improvement in agriculture, industries and service sectors. He also said that per capita income has been rising in recent years from USD 998 in 2017/18 to USD 1034 in 2018/19. He presented that in 2018/19 the private sector credit growth is 21.3 where the target set is 20.
Another keynote speaker Andreas W. Bauers, Senior Resident Representative of International Monetary Fund, delivered his session on ‘Global experiences in banking crisis’ and he said that it is better to be safe than sorry. Bauers indicated that governance, macroeconomic and political environment and banking sector specificities are three basic sources for banking problems. According to him, poor banking practices are usually a reflection of a weak regulatory and supervisory environment.
Stating that banks play a critical role in the economy, he said it is inherently fragile. He said that systemic banking crises have massive economic and social costs. He said, “Nepal is already moving in this direction but there is a need to further strengthen macro policies, supervision/regulation, and safety net.”
Bhuvan Kumar Dahal, CEO of Sanima Bank presented his keynote session on current situation of banking industry in Nepal. Likewise, the panel interview session was held on the topic ‘Financial sector reform in Nepal: Beyond Current’ among Dr. Shankar Sharma, senior economist, Dr. Bimal Koirala, Former Chief Secretary, Government of Nepal, Hari Bhakta Sharma, Formal President, CNI which was moderated by banker Anal Raj Bhattarai.
During the interview session, panelists urged to embrace liberal policies and practices, promotion of industrialization and entrepreneurship, serve the ease to public. According to them, for prosperity, the nation needs to trust and respect its people. Sharma said, “The banking sector in Nepal have done very good even in the worse of weathers. Now is the time to switch to manufacturing and production in addition customer service. Also, we need to overcome the trait of idleness.”
Likewise, Himalaya SJB Rana, the first governor of NRB has shared historical perspective of banking while Sarita Bhatta Adhikari, ED of NRB, Janak Sharma Poudyal, a banker and Ashutosh Tiwari, Managing Director of SAFAL Partners discussed in panel session on ‘Emerging issues in financial system’ which was moderated by Manoj Gyawali, CEO of Jyoti Bikash Bank. In the panel discussion session, Tiwari said that entrepreneurs are still hesitant to go to banks as processing for loan is cumbersome, interest rate is high than said in advertisements or media and there is no mechanism of providing advisory services. He said that the banking institution should not limit to traditional money lending process only it should now focus on job creation where it can make big change in real economy. He further said that banks should think on financial well being also.
As the country’s economy is remittance base which is fragile, the panelists stressed of the need to think how it can sustain the economy through banking.