Bank Supervision in Nepal Needs to Be Improved, Strengthened.
Bank supervision in Nepal needs to be improved, strengthened.
Banks are the pillars of economy in real capitalistic market of a nation. They are prime sources of investment that play vital role in mobilizing resources to an optimum level in business world. The role of banking sector in economic growth and stability requires continuous and reliable service. In Nepal, Nepal Ratra Bank (NRB) is only an authorized body responsible for the monetary regulation and supervision of all banks and financial institutions licensed by it. It regulates price and balance of payments stability, manage liquidity, develop a sound payment system, and promote financial services and financial stability of the nation.
The use of information technology (IT) by financial sector creates numerous challenges of managing and governing it in today’s context. Issues of tackling with changes in technology, migrating system from one to another, maintain adequate internal control system and managing other IT related risks are emerging in banking sector. Frauds through debit and credit cards, ATM, internet banking, mobile banking have increased the risk of financial loss along with other banking risks. Technology risk is not only concerned with operation risk of the bank, other banking risks like credit risk, reputation risk, compliance risk, market risk, strategic risk are also increased due to it. In this scenario, there must be a guideline to regulate sound and robust risk management technology that strengthens system security, reliability, availability and business continuity.
Banks licensed by NRB should maintain the prescribed level of capital fund while opening branches only at prescribed locations. Every NRB reports submitted by bank should be transparent and must be properly reviewed and verified by NRB. Credit information bureau of every client must be recorded and submitted to the concerned authorities for any credit or loan functionalities. To defend illegal users from accessing
Banks are the pillars of economy in real capitalistic market of a nation. They are prime sources of investment that play vital role in mobilizing resources to an optimum level in business world. The role of banking sector in economic growth and stability requires continuous and reliable service. In Nepal, Nepal Ratra Bank (NRB) is only an authorized body responsible for the monetary regulation and supervision of all banks and financial institutions licensed by it. It regulates price and balance of payments stability, manage liquidity, develop a sound payment system, and promote financial services and financial stability of the nation.
The use of information technology (IT) by financial sector creates numerous challenges of managing and governing it in today’s context. Issues of tackling with changes in technology, migrating system from one to another, maintain adequate internal control system and managing other IT related risks are emerging in banking sector. Frauds through debit and credit cards, ATM, internet banking, mobile banking have increased the risk of financial loss along with other banking risks. Technology risk is not only concerned with operation risk of the bank, other banking risks like credit risk, reputation risk, compliance risk, market risk, strategic risk are also increased due to it. In this scenario, there must be a guideline to regulate sound and robust risk management technology that strengthens system security, reliability, availability and business continuity.
Banks licensed by NRB should maintain the prescribed level of capital fund while opening branches only at prescribed locations. Every NRB reports submitted by bank should be transparent and must be properly reviewed and verified by NRB. Credit information bureau of every client must be recorded and submitted to the concerned authorities for any credit or loan functionalities. To defend illegal users from accessing