KATHMANDU, June 9: Minister for Finance, Yuba Raj Khatiwada, has said that the Securities Board of Nepal (Sebon) should not function under the shadow of Nepal Rastra Bank (NRB).
Speaking at a ceremony to mark the 27th anniversary of the Sebon, Minister Khatiwada said that each regulator should operate in an independent and autonomous way.
The statement of the finance minister comes amid concerns that the policies and actions of the NRB – the banking sector regulatory body – was affecting the securities market of the country, eclipsing the regulatory role of the Sebon.
He also underlined the need for each regulatory body to become strong enough to exercise its regulatory authority.
When one regulatory institution becomes strong and effective but another becomes weak, problems could get shifted toward the weak regulatory agency, according to Minister Khatiwada. “When the banking sector is tightened, problem could shift toward the insurance sector. If the insurance regulator gets stronger, the problem could move to Sebon,” he said.
There are multiple regulators in the financial sector. While the NRB regulates the banking sector, Beema Samiti is the regulatory body for insurance sector. Similarly, the Institute of Chartered Accountants of Nepal (ICAN) regulates accounting profession while the Office of Company Registrar also has some form of regulatory authority over the companies established in Nepal.
Experts say that the regulatory roles often get overlapped between these various regulators.
“We have to hold regular meetings of these regulatory bodies and move ahead with close coordination of financial sector. We have to control the shifting of problem from one to another regulatory body,” said Khatiwada.
He also said the government was working toward making regulator more autonomous.
While the law has made the NRB autonomous and independent, the Sebon still lacks a legal authority autonomy over its operation and regulatory power as many decisions have to be approved by the Ministry of Finance, say experts.