Nepal has asked
World Bank (WB) to continue loan assistance under Development Policy Credit-2
programme within the current fiscal year.
"As the
Development Policy Credit-1 has helped Nepal, the continuation of the programme
under budgetary support will make the government easier to prepare
budget," said finance secretary Shanta Raj Subedi during a meeting with visiting
World Bank mission in the capital here today.
The
government will get $70 million (around Rs 7 billion) in loan assistance under Development
Policy Credit-2 for the next fiscal year’s budget.
The
government and World Bank have been working on budgetary support for Nepal
worth $100 million for the last three years.
Last year,
the World Bank provided $30 million in credit under Development Policy Credit to
help accelerate financial sector reform programme aimed at reducing the banking
sector's vulnerability and increase transparency.
The $30
million that came under Development Policy Credit-2 programme was incorporated
in the current fiscal year's budget. The $70 million is the second tranche of the
budgetary support.
The World Bank
mission led by Gabi G Afram said that negotiations for Development Policy
Credit-2 can be finalised in October or early November, though the Finance Ministry
wants to complete the negotiation earlier to plan the resource distribution for
the budget for nest fiscal year 2014-15.
Development
Policy Credit comes as financial sector stability credit for financial sector reform
programme. The Development Policy Credit-1 has supported Medium Term Financial
Sector Reforms Programme that has prepared a long-term financial sector reform
strategy, increased financial access and helped recapitalise Nepal Rastra Bank
and Rastriya Banijya Bank.
The World
Bank will take stock of past performances of the government before committing
its continuation.
The Finance
Ministry claimed that the reform is on track as it is amending the Nepal Rastra
Bank Act and Banks and Financial Institutions Act (Bafia) – both of which are
currently in Parliament – apart from drafting Deposit Insurance Act.
Likewise, capitalisation of
Nepal Bank and Rastriya Banijya Bank is also underway. Nepal Bank has been
selling its assets while Rastriya Banijya Bank is floating shares to increase
its capital base, according to the ministry.
No comments:
Post a Comment