Commercial banks in Nepal still appear to be biased towards the traditional practices for the attraction of potential customers. Meeting the needs of potential customers in the 21st century with the knowledge and training of 20th century is a difficult task. Changes in the marketing strategy within a traditional working structure and system have led the banks towards increasing the non-performing loan (NPL). As every sub-system is a part of a system, a small mistake on the loan disbursement process reflects its implication on the loan recovery process. Hence, a new system in loan disbursement and a loan recovery process makes the bank more effective in its operations. In the new system, all the parties involved in decision-making process should be made responsible to their functions and they need to be penalized accordingly if they fail to promote healthy growth of the banking system.

Tax elasticity and buoyancy estimates are the dynamic tools for measuring the tax performance. This study makes a revisit to the studies carried out earlier to measure tax elasticity and buoyancy in Nepal, in the context of the structural changes that have taken place in the tax system in recent years. The main objectives of the study are to measure the elasticity and buoyancy of tax and to ensure whether or not the tax system in Nepal is elastic. The study has applied time series regression approach for this empirical measurement. This study reveals that the tax system in Nepal is inelastic (less than unity) in the period 1975-2005 with a more than unitary buoyancy coefficients, thus reflecting that the bulk of revenue collection emanates from discretionary changes in the tax policy, rather than from automatic responses.

An efficient financial system can effectively mobilize and allocate resources leading to robust economic growth. Financial liberalization improves the functioning of financial system by increasing the availability of funds and allowing risk diversification and increased investment. The indices of financial liberalization and financial development, generated by the principal component analysis, depict a gradual process of financial liberalization and a continuous financial sector development. The paper finds the presence of bi-directional causal relationship between the liberalization of financial sector and level of financial development in Nepal.

This article investigates whether or not the Nepalese stock market is efficient in weak form with respect to economically neutral behavioural variables. Simple OLS technique with White�s heteroskedasticity-corrected standard errors is used to test the relationship between stock returns and economically neutral behavioural variables represented by weather (cloud cover and temperature) and biorhythms (seasonal affective disorder). The findings indicate the existence of weak-form efficiency in the market for �temperature� and �seasonal affective disorder� but not for the �cloud cover�. These findings are not consistent to those of results documented for developed and emerging stock markets.