SAARCFINANCE Seminar on Regulation and … Seminar on Regulation and Supervision of Microfinance Institutions in SAARC Region Nepal Rastra Bank 2 aspects of monetary policy, exchange

SAARCFINANCE Seminar onRegulation and Supervision of Microfinance

Institutions in SAARC Region20-22 March 2013

IntroductionSAARCFINANCE: Set up in 1998, the SAARCFINANCE is aregional network of the SAARC Central Bank Governors andFinance Secretaries. It is a permanent body, which got formalrecognition of SAARC at the 11th SAARC Summit held inKathmandu, Nepal in January 2002. The broad objectives of thisregional network are to a) promote cooperation among centralbanks and finance ministries in SAARC member countries throughstaff visits and regular exchange of information, b) consider andpropose harmonization of banking legislations and practices withinthe region, c) work towards a more efficient payment systemmechanism within the SAARC region and strive for closer monetaryand exchange cooperation, d) forge closer cooperation on macro-economic policies of SAARC member states and share experiencesand ideas, e) study global financial developments and their impacton the region including discussions relating to emerging issues inthe financial architecture, IMF and World Bank and otherinternational lending agencies, f) monitor reforms of the internationalfinancial and monetary system and to evolve a consensus amongSAARC countries in respect of the reforms, g) evolve, wheneverfeasible, joint strategies, plan and common approaches ininternational fora for mutual benefit particularly in the context ofliberalization of financial services, h) undertake training of staffof the ministries of finance, central banks and other financialinstitutions of the SAARC member countries in subjects relatingto economics and finance, i) explore networking of the traininginstitutions within the SAARC region specializing in various

SAARCFINANCE Seminar on Regulation and Supervision of Microfinance Institutions in SAARC Region

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aspects of monetary policy, exchange rate reforms, bank supervisionand capital market issues, and j) promote research on economicand financial issues for the mutual benefit of SAARC membercountries and consider any other matter on the direction/requestof the SAARCFINANCE, Council of Ministers or other SAARCbodies.

Activities of SAARCFINANCE so far include, among others, thefollowing:

l Sharing of information among the SAARCFINANCE institutions.

l Regular publication of SAARCFINANCE e-Newsletter.

l Developing a link of SAARCFINANCE by the central bankson their websites.

l Visit to different institutions of member countries under the Staff Exchange Programme covering a wide range of issues such as risk-based supervision, human resource management,internal audit and information technology.

l Organizing a number of seminars / workshops / meetings /governors' symposium as well as undertaking special studieson common topical issues.

Nepal Rastra Bank: Nepal Rastra Bank (NRB), the Central Bankof Nepal, was established in 1956 to discharge the central bankingresponsibilities including guiding the development of the domesticfinancial sector. Since then, there has been a huge growth in boththe number and the activities of the domestic financial institutions.To reflect this dynamic environment, the functions and objectivesof the Bank have been recast by the new NRB Act of 2002, thepreamble of which lays down the primary functions of the Bankas a) to formulate necessary monetary and foreign exchange policiesto maintain the stability in price and consolidate the balance ofpayments for sustainable development of the economy;b) to develop a secure, healthy and efficient system of payments;


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c) to make appropriate supervision of the banking and financialsystem in order to maintain its stability and foster its healthydevelopment; and d) to further enhance the public confidence inNepal's entire banking and financial system. NRB is aware that,for the achievement of the above objectives in the present dynamicenvironment, sustained progress and continued reform of thefinancial sector is of utmost importance. Continuously aware ofthis great responsibility, NRB is seriously pursuing various policies,strategies and actions. These activities convey the commitment ofNRB in addressing the present and future challenges of the financialsystem more competently. This dynamic and proactive approachto the financial system is believed to ensure a sustained progressand stability of the financial system under NRB's guidance andleadership, for contributing to the sustainable development of theNepalese economy.

Seminar on "Regulation and Supervision of MicrofinanceInstitutions in SAARC Region"

Nepal Rastra Bank has been an active member of SAARCFINANCEand it has undertaken a variety of activities ever since the inceptionof this network. In this regard, as agreed in the 13th meeting ofSAARCFINANCE held on September 25, 2005 in WashingtonD.C., every member central bank (except Bhutan and Maldives)would organize at least one seminar on the contemporary issuespertaining to the SAARC region. Accordingly, following thiscommitment, and more intuitively, with a view to sharing ideasand experiences among the member countries, this seminar on"Regulation and Supervision of Microfinance Institutions in SAARCRegion" is being organized as decided during the 25thSAARCFINANCE Group meeting held on 14 October 2012 inTokyo, Japan.


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Objectives of the SeminarThe main objective of this seminar is to discuss the pertinent andemerging issues related to regulation and supervision of microfinanceinstitutions (MFIs) to understand better what "best practices" mightbe in the SAARC countries. The other objectives are:

a. To understand the different concepts and rationale relating toregulation and supervision of MFIs.

b. To review the modalities of regulation and supervision of MFIsimplemented by the SAARC member countries.

c. To identify the problems and challenges for the successfulimplementation of policies pertaining to regulation andsupervision of MFIs.

d. To propose a framework of the best practices for regulating

and supervising MFIs.


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Program Details

Wednesday, 20 March 2013

08:45-09:00 Registration

09:00-09:50 Opening Session

09:00-09:05 Welcome RemarksMr. Gopal Prasad KaphleDeputy GovernorNepal Rastra Bank

09:05-09:20 Inauguration and AddressDr. Yuba Raj KhatiwadaGovernorNepal Rastra Bank

09:20-09:50 Keynote AddressDr. Atiur RahmanGovernorBangladesh Bank

09:50-10:15 Tea Break /Group Photograph

10:15-11:30 Session I: Concepts and Rationale ofRegulation and Supervision of MicrofinanceInstitutions

ChairMr. Ganesh Bahadur ThapaChairperson, Centre for Microfinance andChairman, Nirdhan Utthan Bank Limited

10:15-10:45 Paper PresentationDr. Nara Hari DhakalChairmanRastriya Banijya Bank


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10:45-11:00 Lead DiscussantDr. Mohammad AkhtaruzzamanEconomic AdviserBangladesh Bank

11:00-11:20 Questions/Responses

11:20-11:30 Remarks by the Chair

11:30-11:45 Tea Break

11:45-13:00 Session II: Principles and Best Practices ofRegulation and Supervision of MicrofinanceInstitutions

ChairMr. Maha Prasad AdhikariDeputy GovernorNepal Rastra Bank

11:45:12:15 Paper PresentationDr. Tuli RoyGeneral ManagerNon-Banking Supervision DepartmentReserve Bank of India

12:15-12:30 Lead DiscussantDr. Sumitra Manandhar GurungChief Executive OfficerMahila Sahayatra Microfinance Bittiya SansthaLtd.


12:50:13:00 Remarks by the Chair

13:00-14:15 Lunch


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14:15-15:45 Session III: Country Presentations

ChairDr. Rama BasyalAssociate ProfessorTribhuvan University

14:15-14:35 Bangladesh

14:35-14:55 Bhutan

14:55-15:15 India



15: 45-16:00 Tea Break

16:00-17:30 Session IV: Country Presentations

ChairMr. Gopal Prasad KaphleDeputy GovernorNepal Rastra Bank

16:00-16:20 Pakistan

16:20-16:40 Sri Lanka

16:40-17:00 Nepal



18:30 Welcome Dinner

Thursday, 21 March 2013

09:00-10:30 Session V: Panel Discussion on "Regulation ofMicrofinance Institutions in SAARC Region"

ChairMr. Prahlad MaliChief Executive OfficerCentre for Microfinance


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Panelists : Dr. Nara Hari Dhakal Chairman Rastriya Banijya Bank

Dr. Mohammad AkhtaruzzamanEconomic AdviserBangladesh Bank

Mr. Jalan Kumar SharmaChief Executive OfficerSana Kishan Bank Limited

10:30-10:45 Tea Break

10:45-12:15 Session VI: Panel Discussion on "Supervisionof Microfinance Institutions in SAARCRegion"

ChairDr. Harihar Dev PantExecutive DirectorNirdhan Utthan Bank Limited

Panelists: Dr. Tuli RoyGeneral ManagerReserve Bank of India

Dr. Sumitra Manandhar GurungChief Executive OfficerMahila Sahayatra Microfinance BittiyaSanstha Ltd.

Mr. Tulasi Prasad UpretiBoard MemberCentre for Microfinance

12:15-13:45 Lunch

13:45-14:45 Closing Session

13:45-14:00 Rapporteur's Report


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14:00-14:15 Speech on Behalf of the Participants

14:15-14:30 Distribution of Certificates

14:30-14:40 Closing AddressDr. Yuba Raj KhatiwadaGovernorNepal Rastra Bank

14:40-14:45 Vote of ThanksSAARCFINANCE Coordinator

18:30 Closing Dinner

Friday, 22 March 2013

9:00-16:00 Post Seminar Tour

Venue Gokarna Forest Resort

Rajnikunj, Gokarna Thali, Kathmandu


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Short Profile of Keynote SpeakerDr. Atiur Rahman is a renowned economist who was appointedas the Governor of Bangladesh Bank on 1 May 2009. Prior to thisappointment, he was a Professor in the Department of DevelopmentStudies, University of Dhaka, and Chairman of the Board ofTrustees of Shamunnay, a centre for research and development inBangladesh. He was also Chairman of Board of Directors ofUnnayan Shamannay, a non-profit organisation for research,development and cultural learning. His previous roles also includeDirector of Sonali Bank, Chairman of the Board of Directors ofJanata Bank, and a long tenure as a Senior Research Fellow at theBangladesh Institute of Development Studies (BIDS). He has doneextensive published research on the micro-finance revolution inBangladesh and was Chairman of the Credit Development Forum(CDF) for many years.

Dr. Rahman has authored 16 books in English, 29 books in Banglaand numerous chapters in books and journal articles on varioussocio-economic, cultural, historic and public policy topics. He hasserved as Project Director/Team Leader on a number of internationaland national projects related to socio-economic development. Dr.Rahman received his B.A. (Honors) and M.A. in Economics degreesfrom Dhaka University. He graduated with another Masters anda PhD from the School of Oriental and African Studies, Universityof London, in 1983. His fellowships include Visiting ResearchFellowship at the Institute of South East Asian Studies, Singapore,a Ford Foundation Post Doctoral Fellowship at the University ofLondon and a Commonwealth Development Fellowship at theUniversity of Manitoba in Canada.

Short Profile of Resource PersonsDr. Nara Hari Dhakal is presently the Chairman of RastriyaBanijya Bank Limited, Kathmandu. He is also Senior Advisorof Centre for Empowerment and Development, Lalitpur, Nepal.



Earlier, Dr. Dhakal was the Coordinator/Chairman of theManagement Committee of Nepal Bank Limited. His other postsinclude Chairman of Nepal Insurance Company and FoundingVice-Chairman of DEPROSC Development Bank, a fullyautonomous microfinance development bank active in the Nepalesemicrofinance market. He has worked in different national andinternational organizations both in Nepal and abroad as a consultant,project manager, project coordinator, team leader and financialsector advisor. He has promoted numerous savings and creditcooperatives in remote and rural areas of Nepal and providedtechnical support for the establishment of national level microfinanceinstitutions in Nepal and Afghanistan. Dr. Dhakal received hisPh.D in Economics from Tribhuvan University. His fields ofspecialization include, among others, a) macroeconomics of povertyreduction, broad-based and inclusive economic growth andagriculture-led rural development, b) microfinance, macro-enterpriseand rural livelihood improvement and c) small, medium and largeand corporate finance.

Dr. Tuli Roy is currently the General Manager in the Departmentof Non-Banking Supervision, Central Office, Reserve Bank ofIndia, Mumbai. Her job responsibilities include supervision andregulation of large non-bank financial corporations (NBFCs)operating in the Western Zone. Dr. Roy was also involved inpreparation of issue notes for the Working Group on the "Issuesand Concerns in the NBFC Sector" which submitted its Report onAugust 2011. Her publication includes "Recent Changes in MoneyMarket: Some Suggestions for Further Reforms" that was publishedin the book Emerging Money Markets in India (edited by AlakGhosh) in 2001. She joined the RBI in 1988 and has worked atvarious departments of India's central bank. Dr. Roy received herPh.D in economics from Indian Institute of Technology, New Delhi.She is a Certified Associate of the Indian Association of Bankers.



Short Profile of Lead DiscussantsDr. Mohammad Akhtaruzzaman is currently the EconomicAdviser of Bangladesh Bank (BB). Prior to that he was the GeneralManager of the Department of Research of the BB. The otherprofessional positions held by Dr. Akhtaruzzaman include JSPSPost-Doctoral Visiting Research Fellow, University of Tsukuba,Tsukuba, Japan and Associate Professor of Economics at theRajshahi University. He has also worked as a reviewer for a numberof national and international academic journals. He is also servingas a member of several important BB high-powered policy makingcommittees of the Central Bank as well as committees set up bythe Government. Dr. Akhtaruzzaman has made a number ofcontributions to national and international journals. He has becomea Guest Speaker at different universities and educational institutesand has conducted several training programs. He received his PhD.in Trade Economics from Centre for Studies and Research onInternational Development, University of Clermont-Ferrand, France.His fields of specialization and teaching areas includemicroeconomics, macroeconomics, money & banking andinternational economics, among others.

Dr. Sumitra Manandhar Gurung is the Chief Executive Officerof newly established Mahila Sahayatra Micro Finance BittiyaSanstha Ltd. The Institute targets unreached groups by microfinanceservices in the mountain and hilly districts focusing on youth,deprived groups including male members, migrant returnees andvulnerable social groups in urban areas. It is a first national levelmicrofinance institution owned by 100 percent individual womenpromoters and four financial institutions. Dr. Gurung engagedherself in microfinance sector as a Board of Director from theestablishment of Centre for Self Help Development since 1991and later as Board of Director of Swabalamban Bikas Bank. Sheis also the founding member of Women Cooperative Society thatinitiated microfinance program in Kathmandu Valley in 1996 and



became the Executive Chair from 2009-2012. She is currently theChairperson of National Coalition Against Racial Discrimination(NCARD) and founding member and Chairperson of Lumanti,Support Group for Shelter, working with urban poor. Dr. Gurungis a Nepalese geographer by academic background. She completedher Ph.D. from the University of Hawaii, USA. She was alsoeducated at the Asian Institute of Technology, Bangkok, Universityof Colorado, USA and Tribhuvan University, Nepal.



List of Participants

BANGLADESH BANKDr. Md. Kabir AhmedDeputy General ManagerSylhet OfficeE-mail: [email protected] or [email protected]

Md. Nazrul IslamDeputy DirectorDepartment of Banking Inspection 3Head OfficeE-mail: [email protected]

ROYAL MONETARY AUTHORITY OF BHUTANMs. Passang DemaAsst. Examining officerFinancial Regulation & Supervision Department,Email: [email protected]

Ms. Dechen ChodenAssistant Examining OfficerFinancial Regulations & Supervision DepartmentE-mail: [email protected]

RESERVE BANK OF INDIAMr. V. S. PachpatilAssistant General ManagerDepartment of Non-Banking SupervisionE-mail: [email protected]



Ms. Richa Pandey DwivediAssistant General ManagerEmail: [email protected]

NEPAL RASTRA BANKMr. Raman NepalDeputy DirectorMicrofinance Promotion and Supervision DepartmentEmail: [email protected]

Mr. Ananda Raj PoudyalDeputy DirectorBanks and Financial Institutions Regulation DepartmentEmail: [email protected]

Mr. Ramhari DahalDeputy DirectorMicrofinance Promotion and Supervision DepartmentEmail: [email protected]

Mr. Madhav Prasad AdhikariAssistant DirectorBanks and Financial Institutions Regulation DepartmentEmail: [email protected]

Mr. Shalikram PokhrelAssistant DirectorResearch DepartmentEmail: [email protected]



OTHER PARTICIPANTS FROM NEPALMinistry of FinanceMr. Umesh Kumar BasnetUnder SecretaryEmail: [email protected]

National Planning CommissionMr. Tirtha Raj RaiProgram OfficerEmail: [email protected]

Chhimek Laghubitta Bikash Bank Ltd.Mr. Taranath MahatoAssistant Department ChiefEmail:[email protected]

Deprosc Laghubitta Bikas Bank LimitedMr. Madhu Ram KhatriInspection OfficerEmail: [email protected]

Eastern Rural Development Bank LimitedMr. Rajendra Kumar SunuwarManagerInternal Audit and Inspection Departmentemail:[email protected]

First Microfinance Bank Ltd.Ms. Sadikshya RijalAdministrative OfficerEmail: [email protected]



Microfinance Association of Nepal (MIFAN)Mr. Rudra Prasad DahalProgram OfficerEmail: [email protected]

National Cooperative Bank Ltd.Mr. Hari Krishna SapkotaManagerEmail: [email protected]

Nepal Federation of Savings and Credit Cooperative Unions(NEFSCUN)Mr. Ramesh Kumar AdhikariMicrofinance Program OfficerEmail: [email protected] and [email protected]

Nerude Laghubitta Bikash Bank Ltd.Mr. Dinesh KatuwalChief of DepartmentEmail: [email protected]

Nirdhan Utthan Bank Ltd.Mr. Bhoj Raj BasyalDeputy General ManagerEmail: [email protected]

Rural Microfinance Development CentreMr. Basu Dev LamichaneSenior OfficerEmail: [email protected]



Sana Kisan Bikas Bank Ltd.Mr. Shiva Hari AryalSenior OfficerEmail: [email protected]

Swabalambam Laghubitta Bikash Bank Ltd.Mr. Chandra Kanta KaphleChief of DepartmentEmail: [email protected]

Western Rural Development Bank Ltd.Mr. Deepak Prasad PandeyActing Deputy DirectorEmail: [email protected]

STATE BANK OF PAKISTANMr. Muhammad Ashraf KhanExecutive DirectorE-mail: [email protected]

CENTRAL BANK OF SRI LANKA

Mr. S. KurincheedaranSenior Assistant DirectorRegional Development DepartmentE-mail: [email protected]

Mr. T A D WijayakoonAssistant DirectorDepartment of Supervision of Non-Bank Financial InstitutionsE-mail: [email protected]



List of Observers

Mr. Bhaskar Mani GnawaliExecutive DirectorBanks and Financial Institutions Regulation DepartmentE-mail: [email protected]

Dr. Min Bahadur ShresthaExecutive DirectorResearch DepartmentE-mail: [email protected]

Mr. Narayan Prasad PaudealActing Executive DirectorMicrofinance Promotion & Supervision DepartmentE-mail: [email protected]

Mr. Janak AdhikariDirectorHuman Resource Management DepartmentE-mail: [email protected]

Mr. Chintamani SiwakotiDirectorMicrofinance Promotion and Supervision DepartmentE-mail: [email protected]

Dr. Nephil Matangi MaskayDirectorOffice of the GovernorEmail: [email protected]



Mr. Sunil UdashDirectorGeneral Services DepartmentE-mail: [email protected]

Mr. Naresh ShakyaActing DirectorFinancial Management DepartmentE-mail: [email protected]

Dr. Bhubanesh PantSAARCFINANCE Coordinator/DirectorResearch DepartmentEmail: [email protected]



Seminar Management Committee

Coordinator Dr. Min Bahadur ShresthaExecutive DirectorResearch DepartmentE-mail: [email protected]

Member Mr. Janak AdhikariDirectorHuman Resource Management DepartmentE-mail: [email protected]

Member Mr. Chintamani SiwakotiDirectorMicrofinance Promotion and Supervision DepartmentE-mail: [email protected]

Member Dr. Nephil Matangi MaskayDirectorOffice of the GovernorEmail: [email protected]

Member Mr. Sunil UdashDirectorGeneral Services DepartmentE-mail: [email protected]

Member Mr. Naresh ShakyaActing DirectorFinancial Management DepartmentE-mail: [email protected]

Member-Secretary Dr. Bhubanesh PantSAARCFINANCE Coordinator/DirectorResearch DepartmentE-mail: [email protected]



Seminar Management Secretariat

Coordinator Dr. Bhubanesh PantSAARCFINANCE Coordinator/DirectorResearch DepartmentE-mail: [email protected]

Member Mr. Bibhu AryalDeputy DirectorResearch DepartmentE-mail: [email protected]

Member Mr. Satyendra TimilsinaDeputy DirectorResearch DepartmentE-mail: [email protected]

Member Mr. Sanubhai MaharjanComputer SupervisorResearch DepartmentE-mail: [email protected]

Member Ms. Prasannata KafleAssistant DirectorResearch DepartmentE-mail: [email protected]

Member Mr. Shashikant ChoudharyAssistant DirectorResearch DepartmentE-mail: [email protected]



Member Mr. Laxmi Narayan TamrakarAssistant DirectorResearch DepartmentE-mail: [email protected]

Member Ms. Ruku BasnetAssistant DirectorFinancial Management DepartmentE-mail:[email protected]

Member Mr. Krishna K.C.AssistantResearch DepartmentE-mail: [email protected]

Member-Secretary Mr. Badri NepalAssistant DirectorResearch DepartmentE-mail: [email protected]

SAARCFINANCE Seminar on Regulation and … Seminar on Regulation and Supervision of Microfinance Institutions in SAARC Region Nepal Rastra Bank 2 aspects of monetary policy, exchange

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