NBA & IMF 6th ECF Review: Nepal’s Economic & Financial Stability Dialogue
30th May 2025, Kathmandu
The Nepal Bankers’ Association (NBA) met with a team from the International Monetary Fund (IMF) to discuss Nepal’s current financial and economic situation. The meeting was held as part of the 6th Review under the IMF’s Extended Credit Facility (ECF) program.
NBA IMF 6th ECF Review
IMF Delegation Visits Nepal
The IMF delegation was led by Dr. Sarwat Jahan, Mission Chief for Nepal. Mr. Pranav Gupta, IMF’s Resident Representative for Nepal, was also present. Several other senior IMF officials joined the meeting.
The team arrived in Nepal to assess the progress under the ECF program. The visit aimed to engage in meaningful dialogue with key financial stakeholders.
NBA Presents Economic Overview
The meeting took place at the NBA office. NBA Vice-President Mr. Surendra Raj Regmi led the presentation. He was accompanied by Mr. Ashoke S.J.B. Rana, Advisor to the NBA Executive Committee, and Mr. Anil Sharma, CEO of NBA.
The NBA team provided a detailed overview of Nepal’s economic context. They presented data, sectoral analysis, and shared real-time insights from the banking industry.
Key Focus: Credit And Confidence
One of the central topics was the ongoing sluggishness in credit growth. Despite a significant drop in lending rates, credit expansion remains slow.
Mr. Regmi explained that low entrepreneurial confidence is a major factor. Many businesses remain cautious. The private sector is still hesitant to take on new debt.
This has created a gap between banking capacity and credit demand. Commercial banks have liquidity but face limited lending opportunities.
Importance Of Government Spending
The NBA emphasized the need for strong government intervention. Public capital spending must increase. It will stimulate the economy and boost market confidence.
The bankers stressed that government-led projects can have a ripple effect. More spending in infrastructure and development can drive demand in other sectors.
Such actions will also support the financial sector’s expansion. The NBA believes government spending is key to breaking the current economic stagnation.
Financial Sector Trends And Regulation
The IMF team sought updates on financial sector trends. The discussion covered a review of the banking sector’s loan portfolios.
The NBA shared recent data on non-performing loans (NPLs), deposit mobilization, and asset quality. They also reviewed lending to key sectors such as agriculture, manufacturing, and SMEs.
In addition, recent and upcoming regulatory changes were discussed. These include revisions in credit risk management, digital banking policies, and central bank oversight.
Signs Of Recovery Emerge
Despite challenges, there are signs of improvement. Some economic indicators have started to stabilize. Market activities are slowly picking up.
Mr. Regmi expressed cautious optimism. He stated that the banking sector is resilient. It is ready to support the recovery process.
The NBA also noted that remittance inflows remain strong. Tourism and trade have shown modest growth.
Building Investor Confidence
The NBA stressed the importance of rebuilding investor confidence. For credit growth to improve, business sentiment must recover.
They recommended clear communication of government policies. Timely budget implementation is also crucial. Entrepreneurs and SMEs need predictable support mechanisms.
The banking sector is prepared to mobilize credit. However, demand from the private sector must rise for the economy to grow sustainably.
Collaboration With IMF
The NBA welcomed the IMF’s continued engagement. Dr. Jahan acknowledged the role of Nepal’s banking sector in ensuring macroeconomic stability. She appreciated the insights shared during the meeting.
Both parties agreed to maintain regular communication. They aim to work together to strengthen Nepal’s financial resilience.
The ECF program provides technical support and funding. It is designed to help countries facing balance-of-payments challenges. Nepal has been under the ECF since 2022.
The Road Ahead
The NBA believes that policy coordination is essential. Monetary and fiscal policies must align. This is the only way to support long-term recovery.
The bankers also encouraged digital innovation. They highlighted the growth of digital banking services and fintech in Nepal. Such innovations can increase access to finance, especially in rural areas.
The IMF team noted these efforts positively. They agreed that financial inclusion will be crucial for sustainable growth.
Commitment To Economic Stability
The NBA remains committed to supporting Nepal’s economy. It serves as the voice of the banking industry and works closely with national and international stakeholders.
Mr. Regmi assured that the sector is strong, well-capitalized, and prepared for upcoming challenges. With better coordination and clear policy direction, Nepal’s economy can move toward recovery and stability.
The meeting concluded with shared optimism. Both the IMF and NBA see opportunities for progress, provided that key reforms and public investments are prioritized in the months ahead.
About The NBA
The Nepal Bankers’ Association is the umbrella organization of commercial banks in Nepal. It advocates for sound banking practices and policies. NBA promotes financial sector development and contributes to the country’s economic growth through cooperation and dialogue.
For more: NBA IMF 6th ECF Review
