According to various stakeholders, a digital financial system is vital to bring Nepal’s large unbanked population into the formal financial sector so that they can have access to financial services like savings accounts, credit and insurance.
Speaking at an interaction and orientation programme on digital financial systems organised by the Society of Economic Journalists of Nepal in association with the United Nations Capital Development Fund (UNCDF) and Nepal Rastra Bank
(NRB), experts said everyone in the ecosystem had an important role to play in building a robust digital financial system.
They also highlighted the need for an efficient electronic payment system as it would act as a catalyst to build a robust digital financial system.
NRB, the country’s central bank, expressed its commitment to create a favourable environment where digital financial systems would thrive.
“The central bank has established a separate payment settlement department and formulated policies like payment system development strategy and licensing policy for payment institutions to regulate and facilitate digital financial systems,” said Padam Raj Regmi, assistant director of NRB. “Similarly, we are in the process of introducing a transaction limit for retail payments, oversight bylaws and framework and national payment gateways.”
According to Regmi, NRB has issued licences to two payment service providers and three payment service operators and letters of intent 13 other firms which will offer financial services to those not served by banks and financial institutions. “Likewise, we are in the process of issuing letters of intent to 103 firms,” he said.
Industry insiders said low banking penetration and advancements in elecommunication technology had set the stage for digital financial systems to thrive.
“Banking penetration is only 60 percent while 135 percent of the population has access to mobile phones,” said Daniel D Shrestha, chief operating officer of IME Digital. “With the central bank introducing a favourable policy, this is an ideal environment for alternative digital financial systems to thrive.”
Anukool Bhatnagar, vice-president of the Nepal Bankers’ Association, urged banks and financial institutions to adopt new technology to bring a large section of the unbanked population into the digital financial system. “Banks and financial institutions must invest in technology and use it for their own and their customers’ benefit,” he said.
Source: http://kathmandupost.ekantipur.com/news/2018-03-10/digital-system-vital-to-reach-the-unbanked.html
