More than a dozen NRB policies and programs remain stalled

KATHMANDU: More than a dozen policies and programs introduced by Nepal Rastra Bank (NRB) through its monetary policy remain pending, with several key measures still in the study and formulation phase.

The central bank, while releasing the annual review report of the Monetary Policy for fiscal year 2025/26, stated that important initiatives related to structural reforms of banks and financial institutions, digital banking, credit management and financial sector regulation have yet to move into implementation.

According to the report, NRB is still studying the review of existing provisions on loan classification and loan loss provisioning of banks and financial institutions. A detailed study is also underway to revise the classification and working areas of banks and financial institutions.

The central bank has also started reviewing credit-to-deposit ratio regulations after the effective implementation of international liquidity standards, including the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR).

Similarly, policy reforms related to blacklisting provisions arising from cheque dishonour cases remain under review.

Several digital banking initiatives have also been delayed. The plan to establish “neo banks” through necessary legal and procedural arrangements has not been implemented yet. The proposal to link all payments made by public agencies with electronic systems is also still under study.

NRB said it is examining measures to promote digital payments, reduce cheque-based transactions and facilitate foreign investment in infrastructure such as data centres, cloud computing and robotics laboratories.

The review report also stated that policies related to microfinance lending are pending. The central bank had planned to revise provisions regarding target groups, loan eligibility and borrower criteria to ensure loans reach the intended beneficiaries, but the process remains incomplete.

Other pending measures include revisions to licensing and regulatory arrangements for hire purchase companies, as well as studies on foreign exchange and remittance-related policies, gold import and distribution mechanisms, and classification of remittance companies based on capital and transaction volume.

The central bank said these initiatives are being reviewed to strengthen financial stability and improve the overall regulatory framework of Nepal’s financial sector.