1. Financial Stability
Nepal Rastra Bank

2. Financial Stability Framework
Institutional
Financial Stability Oversight Committee
Financial Stability Sub-committee
Financial Stability Unit
FIU
Regulation, Supervision and Payment System Dept.
Policy
Financial sector Development Strategy
Nepal Rastra Bank Act, 2002
Bank and Financial Institution Act , 2006
Unified Directive- Corporate Governance, Basel III, Sectoral Limits, Single Obligor, Financial Inclusion etc
Financial Stability Report – Biannually

3. An Overview and Performance of the Financial System
As of Mid-July 2016
Types of Fis
Number
Share in Financial Assets 1
Nepal Rastra Bank 1 
21.46 
Licensed By NRB
1.1
Commercial Banks 28
47.77
1.2
Development Banks 67
7.67
1.3
Finance Companies 42
2.26
1.4
Microfinance Development Banks
2.20 2
Insurance Companies
 26
3.46 3
Contractual Savings
3.1
Provident Fund
4.92
3.2
Investment Trust
1.82 4
Cooperatives( saving & Credit)
33599
8.44

4. Major FSIs

5. Implementation of Macro-Prudential Policies and Tools
Primary
Basel III – Counter Cyclical Buffer, Leverage Ratio, Capital Conservation Buffer
DSIFI – identification process
Loan to Value – 50%
SOL – 25 to 50 %
Sectoral limit – 40 % ,Real Estate 25%
Others
Deposti Gurantee
CDS
IPS, NCHL
Merger and Acquisition by Law
Bank resolution

6. Systemic Risk Monitoring and Supervision
Policy
Risk based supervision Guideline
AML/CFT supervision Manual
System Audit Guideline
Supervision
Risk Based supervision of Commercial Banks
AML/CFT risk Based Supervision

7. Recovery and Resolution Planning
Power conferred by NRB Act ,2002
Problem Bank Resolution by law, 2015
Improving Management
Changing the management
Prohibition in trasaction
Selling assets
Consolidation
Good assets/Bad assets classification
Bridge Bank

8. Challenges and Way Forward
New subject/Lack of experience
Weak institutional framework/ca. Poor coordination
Implementation of international standards – Basel III, AML/CFT, IFRS
Presence of unregulated sector/parallel banking activities
Way Forward
Identified as a critical subject
High level coordination mechanism
Some of the tools being used- Basel III, Risk based supervision