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InterviewsDecember 1 2017

Nepal’s central bank chief seeks more stability and fewer banks

Nepal is grappling with interest rate and liquidity volatility as well as a relatively large banking sector that has 28 commercial banks. Chiranjibi Nepal, governor of Nepal Rastra Bank, tells Stefania Palma how the central bank is addressing these issues.
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One of the greatest tasks facing Chiranjibi Nepal, governor of Nepal Rastra Bank (NRB), the country's central bank, lies in consolidating its banking sector. NRB is currently supervising 196 banks and financial institutions, including 28 commercial banks, for an economy of just $21bn.

In 2015, Mr Nepal tried to cut the number of banks by increasing the paid-up capital requirement fourfold to Nrs8bn ($76.4m). Some mergers and acquisitions (M&A) materialised, with 157 financial institutions merging into 39, but these mainly involved small lenders and not commercial banks.

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