Since his appointment as the central bank governor, Khatiwada has been vocal against the existing practice of entrepreneurs running banks as well as other businesses--a practice which has prevented banks and financial institutions from upholding good governance. [break]
“It is not possible to separate bankers and other businesspeople by next year. Yet we are trying to formulate a policy that will draw a line between businesspeople and bankers within next three years,” Khatiwada said, addressing a program organized to mark the 58th Anniversary of NRB on Saturday.
He said the practice of same person running banks and other businesses has flourished due to haphazard issuance of operating licenses to banks and financial institutions (BFIs).
“We will formulate a policy that will bar issuance of banking licenses to those who are involved in other businesses in coming days. Businesspeople cannot run banks,” added Khatiwada.
On the occasion, the governor also said that NRB was designing a program to speed up financial sector reform process by taking donor agencies into confidence.
“Unlike in the past, the new financial sector reform program will serve our interest rather than that of donors,” said Khatiwada.
Stating that high priority has been given to create an environment to run banks and financial institutions smoothly, he also informed that NRB completed on-site inspections of 21 commercial banks, 84 development banks and 38 finance companies until the mid-March.
Khatiwada also said that though growth rate of credit disbursement is higher than deposits mobilization, banks and financial institutions have been able to retain 80 percent credit to core-capital-cum-deposit ratio.
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