[13thJanuary, 2014, Kathmandu, Nepal] United Nations Capital Development Fund (UNCDF) under its Mobile Money for the Poor(MM4P)initiative organized a two day training workshop for Nepal Rastra Bank (NRB), in Kathmandu on January 12-13, 2014. The aim of the workshop was to discuss the promotion of branchless and mobile banking to achieve greater financial inclusion and discuss the important role of policy and regulation. Banks have only recently begun to use bank-appointed agents equipped with point of sale devices or mobile phones as a means to win new customers. Members from different departments heard examples of regulations in other markets and engaged each other in discussion on the policies and regulations in Nepal.
Mr. Maha Prasad Adhikari, Deputy Governor of Nepal Rastra Bank inaugurated the session of 28 senior NRB officials who work on issues ranging from regulation and supervision to human resources and training. He was accompanied by Mr. Narayan Prasad Paudel, Executive Director, Microfinance Promotion and Supervision Department, and Mr. Tillman Bruett of UNCDF. The Deputy Governor stressed the frontline role played by NRB in deepening the work of financial sector and inclusion in the country and the need to further efforts to expand access to the financial services. “We still have much work to do in extending financial services, getting them into rural areas and providing more flexible times and locations for low income people to transact. The time is right as technology may help Nepal reach new frontiers. Access through mobile phones and POS- based technology is poised to accelerate financial inclusion ,” stated Mr. Adhikari. “Progress has been satisfactory so far,” he noted and added that the NRB is currently developing a comprehensive payment system plans for the betterment of mobile and branchless banking, among others, to be accessible to all.
The Deputy Governor reminded the officials that Nepal is now a signatory of Maya Declaration, a commitment it made as a member of the Alliance for Financial Inclusion. The Alliance is a network of other central banks and policy makers committed to financial inclusions. “Our commitment includes working on branchless banking and addressing financial literacy and we appreciate the assistance in this from UNCDF . “
Mr. Paudel stated in his opening remarks that the NRB “needs to focus on promoting innovation in form of relevant products and services that disadvantaged customers will adopt and use. This will be crucial to pull people out of poverty.” Executive UNCDF has supported the NRB’s inclusive finance efforts since 2008 and the NRB and UNCDF are in the process of negotiating a second phase of support. Mr. Paudel highlighted that NRB’s work with UNCDF in the past helped reach several hundred thousand unbanked customers and the new project will include a greater focus on technology, agriculture finance and clean energy for low income households .
Mr Tillman Bruett of UNCDF in his closing remarks reiterated the commitment of UNCDF to work closely with NRB to make branchless banking successful in Nepal. “Regulation can play a major role in enabling branchless and mobile banking or hindering it.” He let participants know that during the workshop they will be asked to think not only as regulators, but to “think as if you are a banker or a unbanked person. If you can put on their shoes and walk their path, you have a better chance of developing policy ideas that are good for everyone.” He offered continued support from UNCDF even beyond the workshop to both the regulators and market participants.
The workshop provided experiences of regulations from different countries and facilitated discussions among NRB officials on the financial indicators that could be adopted for better monitoring and supervision of branchless banking. Towards the end of the workshop, importance of consumer protection was highlighted with a view of mitigating risk and ensuring better adoption and usage of the products.
A draft roadmap was drawn by the participants, which will form the basis of further deliberations on policies and regulation on branchless and mobile banking. A core working group with representatives from various departments of NRB is being formed under the aegis of the Deputy Governor. This core group will champion the development of branchless banking and mobile financial services. The group will work closely with UNCDF team and market participants in driving the development of the financial sector.