NRB Government Calls for Good Governance

Independent Business News (IBN), a pioneer television programme producer on finance and economics, organized a half-day workshop on `Good governance in financial sector' today at Kupondole, which was inaugurated by Nepal Rastra Bank governor Bijayanath Bhattarai.

Speakers at the programme that included the board of directors of banks, CEOs of banks, heads of other financial institutions and policy-makers talked about the importance of good governance in order to build strong financial growth. CEO of Standard Chartered Bank Limited Sujit Mundul said good governance is complementary to corporate governance (CG) and as CG facilitates shareholders it is equally responsible for other stakeholders including employees.

"The banking sector is better than other sectors in Nepal, and without a sound banking system strong financial growth can never be expected," said Mundul. He added that there is a need for regulating bodies in order to control the management, a task that is being fulfilled by NRB. Mundul clarified that apart from good academic qualifications the board members of any institution should possess leadership values so as to maintain good governance. Commenting on the paper submitted by Mundul, Kumari Bank CEO Radhesh Pant stated that indeed good governance (GG) is the reason that the banking sector of Nepal is doing far better than other sectors. He added that it not only increases the investment by investors, but also lead to a state of sustainable profit in the long run.

Highlighting the importance of good governance, Pant added that CG increases the company valuation and minimises the misunderstanding between the management and employees. Pant stressed that regulatory bodies should be more proactive in order to implement good governance.

NRB executive director Maha Prasad Adhikari said that good governance is the backbone for the sustainable growth. He pointed out that like in developed countries the banking sector of the country should also practice good governance and address weaknesses so that the risks associated can be minimized.

Concluding the interaction programme, NRB governor Bhattarai said, "The principles of good governance should be honoured and breaches of law, rules and regulations should not be justified just due to mere profit. CG should be prioritized by every institution and then the internal risk management procedures have to be practiced to further strengthen it."