Banks, finance companies still not fully immune.

KATHMANDU: Domestic banks and financial institutions are not out of risk and are still vulnerable, opined Nepal Rastra Bank (NRB) governor Bijayanath Bhattarai."The central bank might add more disclosure requirements," he said talking to the newly elected committee of Society of Economic Journalists Nepal (Sejon) here today. Banks should be operated by prudent norms and should not merely wait for NRB directives, he opined adding that the capital base of banks should be sound. "Few but strong banks is the need of the hour rather than numerous and weak banks that have negative networth and poor Capital Adequacy Ratio (CAR)"
"If banks and financial institutions are not run according to prudent norms, the central bank will take action against them to safeguard depositors' money," Bhattarai, who joined the office after two years, said. "The central bank wil take punitive measures if they do not obey directives and reform themselves."
Since the money in banks and financial institutions is that of the depositors, they should be shielded. After the Nepal Development Bank (NDB) fiasco, the government has brought the deposite insurance programme. "Though there is no full-proof regulatory norm to save banks from failing, deposite insurance can save small depositors," Bhattarai said adding that the financial sector reform programme that has slowed down in the recvent years will also be expedited. - Himalayan News Service