amount of excess provisions that can be included in tier 2 capital will be limited to a certain percentage of a bank ’ s risk - weighted assets, which is still to be determined. this change represents a major improvement that will go a long way toward ensuring that a bank ’ s capital will adequately protect it against unexpected losses and that it will provide incentives to sound provisioning. i am also pleased to note that the early reactions to these changes have been positive. securitisation the second note published in january addressed changes to the treatment of securitisation exposures. we are particularly committed to developing an appropriate and balanced treatment for banks ’ exposures to securitisations since the 1988 accord does not address this important risk management tool. at the same time, a securitisation transaction can result in an extremely intricate structure, which makes it hard to specify a simple rule. public comments on our proposals acknowledged this challenge, as many found the proposed capital rules in the third consultative paper for securitisations to be among the most complicated parts of the new basel accord. many also thought the treatment to be perhaps too conservative. in response, members of the committee pledged in madrid to streamline the relevant proposals. equally important, we wanted to adopt, where possible, requirements that are more compatible with the best practices in use today. the note released in january illustrates the progress we ’ ve made. for example, the industry had previously criticised the differences in the treatment of banks that originate and hold rated securitisation tranches versus banks that invest in the same exposures. the committee will eliminate this difference. instead, it will treat all rated exposures to securitisation structures in the same manner, regardless of whether they are held by an investing or an originating bank. this will furthermore streamline the proposals. likewise, the committee is introducing an internal - assessment approach for determining capital charges against exposures to certain low - risk unrated securitisation positions. under the new treatment, banks will be allowed to derive the risk weights for unrated exposures to asset - backed commercial paper conduits ( mainly liquidity facilities ) by mapping their internal risk assessments to external credit ratings. this simplifies the rules by allowing qualifying banks to rely on existing processes and, at the same time, incorporates best practices into the securitisation framework. other simplifications and improvements include the introduction of greater flexibility in calculating the capital charges on certain pools of assets that may

up to rs. 1 million to small farmers and micro - enterprises towards deprived sector lending has been made. 14. nepal has also developed institutional investors to mobilize resources through the channels other than the banking system. resource mobilized about rs. 500 billion by the non - bank financial institutions – employees provident fund, citizens investment trust and insurance companies – signals the investment capacity of the domestic institutional investors. however, it needs to be complemented by foreign institutional investment. 15. our capital market is still in the developmental phase. however, an increased interest among small investors shows the sign of the long - run growth prospect. nevertheless, increased foreign investment will be a catalyst in deepening and widening the market through the participation of institutional investors and diversification of instruments. ladies and gentlemen, 16. this is not to repeat that nepal needs to mobilize additional resources to develop much needed infrastructure for higher sustainable economic growth. the institutional framework and policy measures that we have designed provide business friendly environment and uphold the interest of the investors. i heartily welcome private sector and foreign investors to invest in nepal. this will contribute to the development of the nepalese economy and help investors to reap the maximum benefit on their investment. 17. nepal rastra bank is committed to promoting domestic investment as well as to facilitating foreign investors to invest, operate and repatriate through institutional and procedural arrangements. 18. last but not least, i take this opportunity to extend my sincere thanks to the organizers for organizing and distinguished guests for attending this event. i would like to thank you all for your participation in the summit and wish the foreign participants an enjoyable stay in kathmandu. thank you very much.