IMF team takes stock of financial institutions

A team of International Monetary Fund (IMF) is studying the current problem in the financial sector.
"The four-member team is studying current problems in the financial sector," central bank spokesperson Bhaskarmani Gyawali said, adding that the mission's visit is a regular one.
The visiting mission after interacting with senior government and central bank officials will recommend the central bank on managing current problems faced by the financial institutions.
"The team will recommend the central bank some measures after their study," he added.
The team is also scanning the balance sheets of some banks and financial institutions to look into possible 'weaknesses' in the statements, as according to the statements their financial health seems good but some institutions have been in trouble recently.
Since long, the IMF has been recommending the central bank to stop issuing the licence to new financial institutions fearing that mushrooming banks and financial institutions might put the entire financial system into risk.
The visiting mission will assess vulnerability and weaknesses, and review the measures taken by the central bank to prevent the systemic risk in the future.
There are 31 commercial banks, 87 development banks, 78 finance companies and 21 microfinance development banks making it to a total of 217 banks and financial institutions licenced by the central bank.
The increasing number of banks and financial institutions have made it difficult for the central bank to regulate and monitor them due to lack of manpower.
The increase in number of the banks and finance companies has, instead, harmed rather than expanding access to finance.
Meanwhile, the International Monetary Fund (IMF) has released the results of the second annual Financial Access Survey (FAS) which does not feature Nepal.
The project was unveiled at the World Bank-IMF Annual Meetings in Istanbul in October 2009 and the results from the inaugural FAS were released in June 2010. The FAS database disseminates key indicators of geographic and demographic outreach of financial services, as well as the underlying data. The reach of financial services is measured by bank branch network, availability of automated teller machines, and by three key financial instruments: deposits, loans, and insurance.
New data on outstanding deposits and loans of households were added for the 2011 FAS. The database aims at supporting policymakers and researchers to strengthen their understanding of the determinants and implications of financial access and usage. The disseminated financial access indicators can help identify knowledge gaps and appropriate policies for broadening financial access, and enable the authorities to monitor the effectiveness of policies over time.
About 140 countries participated in the 2011 FAS, and the FAS website now contains annual data for about 160 respondents covering a seven-year period (2004–2010), including data for all G-20 countries.
The project’s data collection effort, with initial financial support from the government of the Netherlands, complements the work done by the UN and the World Bank in the context of the UN Advisors Group on Inclusive Financial Sectors in which the IMF is represented.
The Project’s periodic surveys make use of the IMF's existing broad network of country correspondents for the IMF's flagship statistical publication — the International Financial Statistics (IFS). The collected annual key financial access indicators are publicly disseminated and support analytical work on the identification of knowledge gaps and the setting of priorities for policies on broadening financial access; monitoring the effectiveness of these policies over time; and advancing research and analysis to strengthen understanding of the determinants and implications of financial access and usage.