Nepal’s Central Bank Under Fire: Risk Management Failures and the Looming Debt Crisis
Amid an unfolding economic crisis, Nepal Rastra Bank (NRB), the central banking authority of the country, finds itself in the crosshairs of mounting criticism. The concern lies in NRB’s apparent failure to implement crucial risk management policies. These policies would oversee the lending practices of Banks and Financial Institutions (BFIs) and Microfinance Institutions (MFIs), thereby safeguarding the country’s financial stability. The repercussions of this shortcoming are far-reaching, fostering excessive borrowing, clouding the transparency of loan exposure, and enabling loan concentration among a handful of significant clients. Together, they pose a formidable threat to individual solvency and the overall stability of the financial system.
Nepal’s Debt Crisis: The Ticking Time Bomb
The Nepal Financial Inclusion Report 2023 presents a grim picture, indicating that nearly 38% of Nepali households are over-indebted. Meanwhile, NRB’s reports reveal a worrying rise in non-performing loans and multiple loans procured by borrowers across various institutions. Despite these glaring warning signs,…
