NP: Financial sector stability DPC

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The objectives of the Financial Sector Stability Credit Program for Nepal is to support the implementation of the financial sector reform program initiated by the Nepalese authorities to reduce the vulnerability of the banking sector and increase its transparency. The credit recognizes the important progress made so far by the Nepalese authorities to tackle financial sector vulnerability and supports the acceleration of a medium term reform strategy which commenced implementation in 2011. This program document describes a stand-alone, single tranche, financial sector stability credit of US dollar 30 million to support the Government's efforts to address financial sector vulnerabilities that remain critical to macroeconomic stability and economic growth. The actions supported under the Development Policy Credit (DPC) form part of a broader, medium term Government program aimed at reinforcing banking sector stability and paving the way for the development of a robust and more inclusive financial sector. The key components of this medium term program are also described in detail in the document. Sufficient overall progress towards the objectives of the medium term program would allow the Bank to provide additional support in the form of a second DPC within about 18 months.