International Finance Corporation (IFC) — a member of the World Bank Group — is working to ensure banks understand sound risk management practices so that they can assess and control business risks, promoting sustainable growth of banking and a stable financial system in Nepal.
"Banks are now facing a volatile situation due to multiple risks threatening the sector," said executive director of Nepal Rastra Bank’s Banks and Financial Institutions Regulation Department Bhaskar Mani Gyanwali, at the inauguration of the Risk Management Training organised by IFC here today.
"IFC’s initiative will help banks reduce risks, or take risks knowingly to exploit business opportunities, so that banks become sustainable and resilient," he added.
The central bank has been stressing on the need for increased risk awareness and sound industry-wide risk management practices to ensure stability in the banking sector.
"Sustainable access to finance is critical for private sector growth," said IFC’s resident representative in Nepal Valentino S Bagatsing, on the occasion, adding that banks can benefit from IFC’s global expertise in financial risk management to improve profitability and performance.
As part of the initiative, IFC has guided 30 senior executives of leading Nepali banks on how to assess key risks and tackle these using the best global practices. The initiative will help sharpen the skills of the bankers in dealing with all kinds of risks — credit, operational, market, asset liability management, liquidity and capital management.
IFC’s global risk management specialist Cameron Evans, who is leading the initiative, updated the participants about global financial crisis and its implications, including integrated risk management structures and processes, risk governance and regulations.
IFC’s Access to Finance Risk Management Advisory programme provides technical assistance to the financial sector globally to develop robust risk management systems, assisting in implementing risk management best practices in emerging markets in particular.
The programme also supports regional advisory and investment programmes to appraise risk management systems and to help strengthen monitoring of loan portfolio.
IFC is the largest global development institution focused exclusively on the private sector. It helps developing countries achieve sustainable growth by financing investment, mobilising capital in international financial markets, and providing advisory services to businesses and governments.In fiscal year 2012, IFC investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges.