Nepal government needs to improve legal framework governing the financial sector to match the international standard in order to ensure overall development of financial sector of the country, experts have said.

“Improved legal framework would enable Nepal to develop the foundation of bright future in the changed political atmosphere of the country with support of our friends and development partners,” Nepal Rastra Bank (NRB) Governor Bijaya Nath Bhattarai said addressing the 35th Asian Clearing Union (ACU) board meeting held in the capital Monday.

Governor Bhattarai said that the new NRB Act 2002 has helped regulate and supervise the financial system effectively, preventing the financial sector of the country from systematic risks. The external sector has remained stable with the overall Balance of Payment (BOP) registering the surplus of 13.8 billion rupees and the gross foreign exchange reserves rising by 11.2 percent to 144.4 billion rupees, mainly due to increasing workers remittance, he further said.

Similarly, talking to journalists, Governor of the Reserve Bank of India (RBI) Dr. Y.V Reddy explained that the Indian government has formed a committee to improve the system of remittance in order to facilitate cheaper, reliable and faster ways to send money to India by Non Resident Indians (NRI) and Indians working abroad.

Yadhav further said he would refer the fact to the committee that a huge amount of money comes to Nepal from India annually in the form of remittance, so there is need to improve the system to enhance remittance from India to Nepal.

Responding to the query on the main factors behind India’s high rate of economic growth Yadhav said, “It’s a gradual process since last three decades, largely due to the democratic practice and liberal economic approach.”

“India is ready to provide all kinds of technical and financial support towards the financial development of Nepal,” he added.

Governors and high-level delegates from Nepal, India, Bhutan, Bangladesh, Iran, Pakistan, Sri Lanka and ACU representatives participated in the meet.

The ACU in 1974 began the trade worth of US$ 51.4 million in its first year of operation has traded worth US$ 8199.6 million in 2005, achieving an increase of 23 percent over the corresponding figure of previous year.