After the act goes into force, NRB will transfer its responsibilities of regulating and supervising microfinances, cooperatives and non-governmental organisations (NGOs) to the new regulatory body.

It has not decided whether the new regulatory body will be overseeing microfinance banks, cooperatives and non-governmental organisations which have received their licences from

other government institutions instead of NRB, said Kafle who is also coordinating the drafting of the act.

NRB has licensed 12 microfinance development banks and 16 NGOs to carry out limited banking activities.

According to NRB officials, the move is aimed at making NRB more focused on concrete functions instead of the huge number of mushrooming small financial intermediates.

There are 25 commercial banks, 58 development banks and 79 finance companies in operation in the country. “We

want to focus on these big financial institutions,” Kafle said.

He said that NRB would be mainly responsible for generating resources for the new regulatory body.

On the other hand, the same act will also have a provision for establishing a national a microfinance development fund to finance micro-credit institutions and strengthen their capacity.