Project Duration: March 2002 – December 2007.
To enhance the role of the Nepal Rastra Bank in the overall financial system of the country, it became necessary to think over various models, which would confer greater autonomy and independence to the Nepal Rastra Bank. Thus, the new Nepal Rastra Bank Act, 2002 has been promulgated to provide sufficient autonomy in conducting monetary policy, regulation and supervision of banking and non-banking financial sector and licensing of banks and non-banking financial institution. The central bank clearly recognizes the critical importance of effective supervision within an appropriate regulatory framework so as to ensure that the banking sector fulfills its dual responsibility of protecting depositors’ savings and allocating these saving in the most productive sectors for faster economic growth. The Nepal Rastra Bank is thereby tasked with furthering the goals of achieving transparency in the disclosure of financial information by banks particularly through the introduction of higher auditing and accounting standards empowering depositors in making prudent decision on the selection of banks they want to deal with.