BFI Board Members Need Financial Literacy

BFI Board Members Need Financial Literacy

Feb. 14, 2015, 5:45 p.m. Published in Magazine Issue: Vol: 08 No. -16 February. 13- 2015 (Falgun 1, 2071)

Nepal Rastra Bank (NRB) Governor Yuba Raj Khatiwada has said there is a need to provide financial literacy training to ´upper level´ officials of banking industry and not just the general public.

He also revealed that many board members of banks and financial institutions (BFIs) come to complain with him saying that they jumped into the banking business without knowing its norms and basic things and now they want to exit it. “More than 100 board members have been sharing similar concerns with me. It shows that they do not have much idea about banking norms,” Khatiwada said, underscoring the need to raise awareness among board members along with general public on financial literacy.

“Some board members of micro finance institutions come to me and ask what this micro finance is all about. When I tell them that how are you formulating policies at your company to extend loans to the deprived community, they say their CEO is doing all these things and they just take briefings from him. This is the situation of financial literacy at the policy level,” said Khatiwada.

NRB Governor Khatiwada was speaking at a launch of ´Financial Literacy Campaign´ organized by Rastriya Banijya Bank Ltd (RBBL). “Apart from general level of awareness among public, we, at the higher level, also do not know some terminologies of the financial market. We also need to be aware in this regard,” Khatiwada added. “Service seekers as well as banking service providers and operators of the banks should be financially literate.”

Governor Khatiwada also said that financial literacy campaign should focus on raising awareness among people about the importance of insurance and capital market. “You should also teach the people about the importance of insurance and capital market as this integrated effort can assist in ensuring financial stability in the country,” he added.

According to Governor Khatiwada, such a campaign is instrumental in ensuring financial access along with increasing financial access to unbanked people. “Depositors, who do not understand the importance of insuring their deposit up to Rs 200,000, can quickly run to the bank if that bank plunges into problem. It might create crisis in the banking sector," he said, adding that campaigns like this can help in ensuring financial stability.

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