INTERNATIONALIZATION OF NEPAL'S FINANCIAL SERVICES

The prime responsibility of the financial sector is converting savings into productive investment. A well functioning financial system allocates savings to the best possible use, i.e. productive investment. This crucial role established the financial system as the 'brain of the economy' that determines what gets done and what does not.
The roles and responsibilities of the financial sector grow as societies develop. As a result of unprecedented world development in the last century, the financial sector has grown dramatically and emerged as one of the most important as well as the most dynamic sectors of the world economy, both in developed and developing countries. On an average, at the global level, financial sector contributes nearly 10 percent to GDP and equal percentage in the export of commercial services. In Nepal, too, the financial sector contributes over 10 per cent of the GDP. But the sector contributes only 0.2 percent of Nepal's commercial services exports in the year 2003.
It is empirically proven that the growth and stability of an economy largely depends on the capacity and efficiency of her financial system, and the capacity and efficiency of financial system is largely influenced by its internationalization.