Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal Rastra Bank has issued financial literacy guidance, 2079. The guidance has been issued to maintain public confidence in the financial system and to include economic activities in the financial system.
In order to promote financial literacy campaign, Rastra Bank has already issued ‘Financial Literacy Framework, 2079’ for banks and financial institutions. It is believed that the guidance issued on Friday will help in building the necessary institutional infrastructure for financial literacy.
According to the National Bank, the guidelines have been introduced with the aim of ensuring the use of financial literacy study materials focused on the target group and creating a basis for its monitoring.
Its objective is to develop responsible financial behavior by increasing financial awareness, knowledge and skills and to make the use of modern financial technology simple, easy and effective.
This guidance has been prepared so that the role of banks and financial institutions is to make people who lack financial knowledge join the formal system. Now banks and financial institutions will have to conduct financial literacy programs by preparing annual programs.
“The financial literacy program needs to be developed in order to develop the necessary structure and suitable for the target group, including various areas of financial knowledge”, it is mentioned in the guidance.
According to the central bank, while preparing the plan, the financial knowledge, skills, attitude and behavior of the target group should be looked at and the program should be run accordingly.
The target customers will also have to be classified. Rashtra Bank argues that classification of customers is necessary because different types of financial literacy are required for people who are employed, farmers, small entrepreneurs, students, women, youth, and people who receive remittances.
According to the guidelines, banks and financial institutions should establish a financial literacy unit at the central office or assign the responsibility to a unit for the effective implementation of the financial literacy program.
The unit should prepare an annual action plan related to financial literacy and conduct various programs at the local and regional levels. While conducting such programs, priority should be given to remote and less financially accessible places.
Banks and financial institutions should make clear about the services they provide while disseminating material related to financial literacy.
“Banks and financial institutions have to develop necessary mechanisms so that the general public can easily understand and get information about various types of subsidized loans, payment services based on modern technology, complaints hearing and management systems related to financial services”, the guidance states.
The central bank will also monitor whether or not banks and financial institutions have implemented financial equity programs.
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