Bank Supervision in Nepal Essay

Banks are the pillars of economy in real capitalistic market of a nation. They are bill sources of investment that play vital grapheme in mobilizing resources to an optimum level in business world. The role of situateing sector in economic growth and constancy requires continuous and reliable service. In Nepal, Nepal Ratra Bank (NRB) is completely an authorized body responsible for the monetary regulation and supervision of all banks and financial institutions licensed by it. It regulates price and balance of payments stability, manage liquidity, develop a sound payment transcription, and promote financial function and financial stability of the nation. The use of information technology (IT) by financial sector raises numerous challenges of managing and regime it in todays context.Issues of tackling with changes in technology, migrating system from one to another, maintain adequate internal mark system and managing other IT related risks are emerging in banking sector. Fra uds through debit and credit cards, ATM, internet banking, mobile banking have increased the risk of financial loss along with other banking risks. Technology risk is not only concerned with operation risk of the bank, other banking risks like credit risk, reputation risk, accord risk, market risk, strategic risk are also increased due to it. In this scenario, there essentialiness(prenominal) be a guideline to regulate sound and robust risk management technology that strengthens system security, reliability, availability and business continuity.Banks licensed by NRB should maintain the prescribed level of capital fund term opening branches only at prescribed locations. Every NRB reports submitted by bank should be transparent and must be properly reviewed and verified by NRB. Credit information bureau of every client must be recorded and submitted to the concerned authorities for any credit or loan functionalities. To defend guilty users from accessing banking system, it is e ssential to well educate customers to conduct banking operation securely. Similarly, it is also important to educate other stakeholders including its employees to create effective information security practice.Summarizing up, NRB being an apex body, it should seriously pursue various policies, strategies and actions to maintain the stability in price and consolidate the balance of payments for sustainable development of the economy of Nepal. The increasing complexity of IT in banks creates significant risk to which comprehensive risk management comprising of various standard internal witness framework, banks own requirement and NRB requirement must be implemented. To ensure effectiveness of implemented control framework and adequacy of the adopted security plan and procedures, banks should conduct Information System (IS) audit annually. They should clear provide information about the services, cost, security features, risk and benefits of electronic banking environment.