Unveiling the budget for Fiscal Year 2015/16, Minister of Finance Ram Sharan Mahat said: "As the role of financial inclusion is important in expansion of economic activities, opening of at least one bank account for every household will be started as a campaign."
The campaign, which closely resembles the 'Jana Dhana Yojana' campaign introduced by Indian Prime Minister Narendra Modi, is expected to bring every household into banking system.
"Financial access will be increased through expansion of branchless banking and mobile banking," added Mahat.
Similarly, the government has also said it will make all payments through banking system now onwards. The government's intention to go toward 'less-cash' society is also reflected in the budget. According to the budget announcement, the government will accept revenue worth more than Rs 500,000 only through checks. The government has also said that it will fix a threshold for tax transaction. It means transactions worth more than the threshold will not be allowed in cash.
NMB launches special account to implement government’s bank acc...
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Similarly, the government is establishing 'Economic Refinance Fund' in Nepal Rastra Bank (NRB) to provide subsidy on interest and refinance facility to residential homes, agriculture and tourism sectors that have been damaged by the recent earthquake.
The government is giving continuity to arrangements that the central bank has made for loan provisioning requirement, loan restructuring and capital adequacy calculation of the BFIs.
Encouraged by the merger spree in the banking industry, the government has said that it will encourage merger among insurance companies.
Bankers have hailed the government initiative to increase financial access. "Many programs related to the banking sector are aimed at increasing financial access. This will help to promote banking business and bring the people under the financial bracket. This will ensure financial transparency, expand economic activities and boost banking business," Upendra Poudyal, president of Nepal Bankers Association, told Republica.
INFRASTRUCTURE BANK TO BE ESTABLISHED
The government has announced to form infrastructure bank. Private sector had long been demanding for formation of such bank stating that existing financial institutions of the country are undercapitalized or lack long-term liquidity for financing infrastructure projects which require financing with long maturity periods. The government has stated in the budget that it will collaborate with the private sector for formation of infrastructure bank.
Realizing the need to increase capacity of institutions to finance infrastructure projects, Finance Minister has also said that the government will restructure NIDC Development Bank and Hydropower Investment Development Company Ltd -- the government undertaking.
AGRO LOAN TO BE SIMPLIFIED
Giving continuity to subsidized agro loans with six percent interest rate, the government has pledged to simplify processing of such loan and increase access of small and medium farmers to such benefit.
Likewise, farmers carrying out irrigation in at least 50 hectares of land using renewable energy in areas with possibility of lift irrigation will be provided 50 percent subsidy on renewable energy tax and agricultural loan interest rate.
