Government Unveils Aggressive 100-Day Reform Plan to Reshape Nepal’s Banking and Financial System

Kathmandu — The Government of Nepal has introduced an ambitious set of financial sector reforms under its 100-day governance roadmap, aiming to restructure the banking system, improve transparency, and channel excess liquidity into productive sectors. The plan reflects a policy shift toward strengthening regulatory oversight while simultaneously promoting credit expansion in sectors deemed critical for long-term economic growth.

One of the central pillars of the reform package is the directive to reduce risk weights on loans extended to small and medium enterprises (SMEs), agriculture, and the information technology sector. By lowering the regulatory burden on such lending, policymakers intend to incentivize banks and financial institutions to redirect funds toward productive industries rather than speculative or low-impact investments. This move is particularly significant at a time when Nepal’s banking system is grappling with high liquidity levels, signaling a mismatch between available capital and viable investment avenues.

In parallel, the government has emphasized modernization of digital banking infrastructure and expansion of financial access in rural areas. The push toward digitalization is expected to reduce operational inefficiencies, enhance financial inclusion, and bring more unbanked populations into the formal financial system. Analysts view this as a structural reform that could gradually reduce dependency on physical banking networks while improving service delivery and transaction transparency.

A major compliance-related reform is the mandatory implementation of electronic billing (e-billing) for large companies within 30 days. This provision is designed to curb tax evasion, formalize business transactions, and strengthen revenue collection mechanisms. Complementing this, the government plans to roll out a National Digital Registry within 100 days, which will integrate financial data across institutions. This registry is expected to play a crucial role in identifying irregularities, tracking financial flows, and enhancing overall governance in the financial ecosystem.

The government has also announced plans to mobilize dormant financial resources by bringing funds from inactive bank accounts—those unused for over a decade—into the state treasury through legal procedures. This measure aims to improve the utilization of idle capital while ensuring that rightful claimants are given due opportunity to recover their funds. Such a policy reflects a broader intent to optimize resource allocation and reduce inefficiencies within the financial system.

Further reforms target revenue administration, with a clear focus on automation and transparency. The Ministry of Finance has been tasked with formulating and implementing a detailed action plan within 45 days to digitize tax processes, minimize leakages, and simplify taxpayer services. Additionally, the government has identified inefficiencies arising from the existence of over 139 fragmented funds and has proposed their consolidation within 60 days. The consolidated funds are expected to be redirected toward high-return projects, thereby enhancing public investment efficiency.

In the agricultural sector, the government has introduced a strict payment discipline mechanism to protect farmers. Businesses purchasing agricultural produce on credit will now be required to settle payments within a maximum of 25 days, failing which interest penalties will apply. This provision aims to ensure fair pricing and timely payment for farmers, addressing long-standing issues of delayed settlements and financial insecurity in the agricultural supply chain. Complementary initiatives such as a national agricultural market information system, SMS-based price dissemination, and the establishment of cold storage facilities under a “one local unit, one cold store” model further reinforce the government’s commitment to agricultural commercialization.

Another notable reform is the introduction of a digital asset registry to combat corruption and monitor suspicious financial activities. The system will integrate data from bank accounts, digital wallets, share transactions, and other financial instruments, enabling automated detection of irregular transactions. This initiative marks a significant step toward data-driven governance and financial surveillance, aligning Nepal’s regulatory framework with global standards in anti-money laundering and financial transparency.

Overall, the government’s 100-day reform agenda presents a comprehensive attempt to recalibrate Nepal’s financial architecture. While the policies are ambitious and wide-ranging, their success will depend largely on effective implementation, inter-agency coordination, and the responsiveness of financial institutions. If executed as planned, these measures could not only strengthen the banking sector but also create a more resilient and inclusive economic environment.