Kathmandu: Governor Dr Bishwanath Paudel of Nepal Rastra Bank has introduced a series of new regulatory tools designed to optimize the operations of the banking sector. As part of the monetary policy for the upcoming fiscal year, he has brought forward several innovative measures aimed specifically at helping banks and financial institutions curb their rising operational expenditures.
One of the key strategies proposed involves granting banks more flexibility in the administrative processes for opening and closing branches.
Furthermore, the Governor emphasized that the central bank will actively encourage the large-scale digitalization of financial services, viewing it as a primary method for banks to enhance efficiency while significantly reducing overhead costs.
In addition to operational reforms, Governor Paudel suggested major shifts in credit practices, such as tightening the requirements for personal guarantees from institutional borrowers to prevent the burden of unlimited liability.
His vision for the banking sector also includes refining the criteria for blacklisting to ensure fewer individuals are penalized, managing non-performing loans associated with sick industries, and implementing revival strategies for stressed assets currently facing repayment pressures.
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