Healthy competition in financial sector very important: Dr. Mahat

By A Staff Reporter,Kathmandu, July 12: Finance Minister Dr. Prakash Sharan Mahat has stressed on the need for healthy competition in the financial sector.

He made this remark while addressing a social dialogue on the challenges, solution and further direction of Nepal's financial sector organised by the National Committee of the Nepal Financial Institution Employees Association here on Tuesday.

He said that if the financial institutions are not just saying that they are not getting facilities, but are conscientious about their responsibilities and can regulate themselves, the economy of the country will move on the path of healthy competition.

Dr. Mahat said, “Organisations are not formed just for their own interests, but if they are responsible and dutiful towards their members, it will give positive results.”

He said, "If interest rates and other issues are decided by compromise, sooner or later it will create problems. Healthy competition in the financial sector is very important."

In the programme, Dr. Mahat said that the financial sector has expanded extensively after 2046 B.S.

“As there are many insurance companies, there is talk of merger now. The growth of the financial sector has been extensive compared to other sectors. Due to the changes in technology, transparency has also developed a lot. This is a matter of happiness for everyone,” he said.

“BFIs will adopt international standards. I believe that the rights and safety of consumers will be given top priority. Despite the growth of the banking sector, banks that are in trouble have improved with the help of Nepal Rastra Bank. There is also a need for improvement in the Agricultural Development Bank,” he said.

He, however, said that there are some problems in the field of microfinance companies and cooperatives, and in the budget, it is proposed to establish a body to bring cooperatives under the regulatory framework.

“We are in some problems in the immediate environment, we are in the process of getting out of this problem. According to the latest data, the inflation rate is decreasing. It is good if it is below 7 per cent, our goal is to bring it to 6.5 per cent next fiscal year,” said Dr. Mahat.

He said that NRB was worried that three would be pressure on inflation but the latest report showed that the inflation was under control.

Stating that the objective of monetary policy was not only to control the price hike, but also to stabilise and increase the overall economy, he said, "Monetary policy will address these issues at the beginning of the next fiscal year.”