The International Development Association (IDA), the anti-poverty support programme of the World Bank Group, is providing $100 million (approximately Rs10.70 billion) in loan assistance to the government to launch programmes to ensure stability in the financial sector.

Finance Secretary Shanta Raj Subedi and the World Bank Country Director to Nepal Qumiao Fan signed an agreement in this regard on Tuesday. 

The objective of the assistance dubbed the ‘Financial Sector Stability Development Policy Credit III’ is to help step up Nepal’s medium-term reform programme for the stability of financial sector; reduce the vulnerability of the banking system; and increase its transparency, says a statement issued by the Ministry of Finance. 

This is the third in the series of this development credit facility from the World Bank. The proposed credit will support four main policy areas: enhancing financial sector development, restructuring and consolidating the financial system, strengthening the legal and regulatory framework, and enhancing the governance and transparency of the banking sector. 

The loan assistance will be extended in the form of budgetary support. The government can use the assistance in accordance to its needs and priority areas, says the statement.

The government has been receiving such budgetary support from the World Bank through Development Policy Credit window to implement policy reforms in the financial sector, which is critical to enhance economic growth and for sound financial governance.  Nepal previously received this credit facility in June 2013 and June 2015.