Financial Sector Technical Assistance Project

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The main objective of the reform program in the financial sector in Nepal, is to support renewed government efforts to improve the sector, prod macroeconomic stability, and promote private-sector-led economic growth. To this end, the Financial Sector Technical Assistance Project will focus on restructuring the Central Bank, initiating commercial banking reforms, and supporting financial reforms, through its project components: 1) The Central Bank of Nepal - Nepal Rastra Bank (NRB) - needs to strengthen its core central-banking functions, including human resource management, banking supervision and regulation, accounting and auditing, research and monetary policy analysis, information technology, and internal auditing, changes which will take place within the context of a complete re-engineering of NRB. To this end, technical, and financial assistance support will be provided to review the legislative framework, as well as capacity building in internal auditing, while a comprehensive training plan will improve staff skills. 2) The two large commercial banks - RBB and NBL - will be restructured, through technical, and financial support in their initial restructuring, and privatization, or liquidation programs, supported by management teams, and international consultants, to strengthen operational skills, credit and loan recovery departments, including accounting and internal auditing, and information technology. 3) Additional capacity building will be supported for the financial sector, through support for the Banker's Training Center, Credit Information Bureau, and financial journalism, while the coordination support team will strengthen project financial management, and procurement capabilities, through technical assistance, and training, as well as related institutional strengthening measures.