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The Royal Securities Exchange of Bhutan (RSEB) was established in August 1993 and officially opened for trading on 11th October 1993. It was established as a non-profit making and quasi-public organization under the aegis of the Royal Monetary Authority (RMA). The objectives of the company are to encourage a wider spread of share ownership in the enterprises, mobilize savings, provide a platform to raise equity capital for new ventures and to provide liquidity to the existing shareholders. Developed under the Technical Assistance of the Asian Development Bank, RSEB was incorporated under the Companies Act of the Kingdom of Bhutan, 2000 and is regulated by the Financial Services Act, 2011. In July 1996, RSEB was delinked from the RMA as an autonomous body. At present, RSEB operates as a membership organization comprising of four brokerage firms including BNB Securities Ltd, BOB Securities Ltd, RICB Securities Ltd, and BDB Securities Ltd. The brokerage firms are the subsidiary companies of four financial institutions. Over the years, the total number of shareholders increased significantly. As of 31st December 2014, there were over 62,000 shareholders compared to 1,828 shareholders in 1993.

The number of listed companies has also grown simultaneously. In 1993, there were four companies listed to trade shares with a market capitalization of Nu 493.40 million and as of 31st December 2014, there are 21 companies listed with a market capitalization of Nu 22,498.20 million. On April 23rd, 2012, RSEB moved its securities market to a new and enhanced trading system. The RSEB Integrated System replaced the traditional system that was used for 19 years ever since it was launched in 1993. The new system was established with grants from the World Bank and developed by the InfoTech Pvt. Ltd as per the requirement of the exchange.

The global financial crisis of 2008 proved that sound macroeconomic policies, low inflation, and low or no budget deficits do not necessarily create economies that can weather financial instability. Surveys conducted after the financial crisis have shown that economies with resilient financial sectors and high economic growth are also no guarantee of balanced and inclusive growth. This has become all too clear in times of disaster, such as Typhoon Haiyan in the Philippines, when the poorest and most vulnerable were still not protected by a stable national economy. In these times of financial, economic and social crisis, policymakers have recognized the powerful links between macroeconomic stability, financial stability and financial inclusion in achieving balanced and inclusive economic growth. As economies recover from the global recession, the need to harmonize financial inclusion and financial stability objectives has become even more pronounced. The concept of financial stability is gaining traction in the macroeconomic frameworks and policies of both developing and developed countries and leaders and policymakers are making public, high-profile commitments to financial inclusion through initiatives such as AFI’s Maya Declaration.

This AFI Viewpoint, “ Managing the Twin Responsibilities of Financial Inclusion and Financial Stability” reflects on country experiences and trends in this area at both global and national levels. Although the paper shares the experiences of particular countries and studies, the objective is not to propose a ‘ one size fits all’ model or recommend a single approach. Rather, the aim is to reflect on a range of approaches and perspectives. A United Nations workshop in Bhutan concluded today, with participants agreeing on the need for technical cooperation projects that would help bolster the Himalayan kingdom’s defenses against future financial and economic crises. The three-day high-level national workshop on the implementation of monetary, fiscal, and external debt policies was organized by the Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Development Program (UNDP) and hosted by the Royal Monetary Authority of Bhutan (RMA). It is part of ESCAP’s program to assist member States “in building their capacity to make appropriate policy responses that mitigate the impact of the economic crisis, restore growth and avoid future global shocks.” The workshop discussed the effective coordination of monetary, fiscal and debt management policies at the national and regional levels, and allowed policy-makers from Bhutan to learn from the experiences of Bangladesh, India, Pakistan, and Thailand, and to identify best practices and areas for future cooperation.

Workshop participants discussed Bhutan’s plans to develop markets for Treasury Bills, which will provide a benchmark interest rate to guide the setting of deposit and lending rates. Participants from India and Pakistan provided details on their countries’ experience in developing markets for Government securities and in setting up repurchase agreements for the short-term control of liquidity. A participant from Thailand explained how the country strengthened its supervision of the banking system after the crisis of 1997 and how such measures helped the country weather the impact of the global financial crisis of 2008. Workshop participants also discussed ways to increase fiscal revenues, which is at the moment a critical policy priority for Bhutan. In assessing the impact of the crisis on Bhutan’s economy, Daw Tenzin, Managing Director of the Royal Monetary Authority of Bhutan, noted that the economy kept growing at a similar rate as the year before, despite some loss in revenue in tourism and drops in output in some manufacturing industries. However, the economy has shown some signs of stress, with the budget deficit, the current account deficit and the amount of money in circulation increased significantly during 2009.

In the 18th century, the Bhutanese invaded and occupied the kingdom of Cooch Behar to the south. In 1772, Cooch Behar appealed to the British East India Company which assisted them in ousting the Bhutanese and later in attacking Bhutan itself in 1774. A peace treaty was signed in which Bhutan agreed to retreat to its pre-1730 borders. However, the peace was tenuous, and border skirmishes with the British were to continue for the next hundred years. The skirmishes eventually led to the Duar War (1864–65), a confrontation for control of the Bengal Duars. After Bhutan lost the war, the Treaty of Sinchula was signed between British India and Bhutan. As part of the war reparations, the Duars were ceded to the United Kingdom in exchange for a rent of Rs. 50,000. The treaty ended all hostilities between British India and Bhutan. During the 1870s, power struggles between the rival valleys of Paro and Tongsa led to civil war in Bhutan, eventually leading to the ascendancy of Ugyen Wangchuck, the ponlop (governor) of Tongsa. From his power base in central Bhutan, Ugyen Wangchuck defeated his political enemies and united the country following several civil wars and rebellions during 1882–85.

In 1907, an epochal year for the country, Ugyen Wangchuck was unanimously chosen as the hereditary king of the country by an assembly of leading Buddhist monks, government officials, and heads of important families.John Claude White, British Political Agent in Bhutan, took photographs of the ceremony. The British government promptly recognized the new monarchy, and in 1910 Bhutan signed the Treaty of Punakha, a subsidiary alliance which gave the British control of Bhutan's foreign affairs and meant that Bhutan was treated as an Indian princely state. This had little real effect, given Bhutan's historical reticence, and also did not appear to affect Bhutan's traditional relations with Tibet. After the new Union of India gained independence from the United Kingdom on 15 August 1947, Bhutan became one of the first countries to recognize India's independence. On 8 August 1949, a treaty similar to that of 1910, in which Britain had gained power over Bhutan's foreign relations, was signed with the newly independent India. In 1953, King Jigme Dorji Wangchuck established the country's legislature – a 130 member National Assembly – to promote a more democratic form of governance. In 1965, he set up a Royal Advisory Council, and in 1968 he formed a Cabinet. In 1971, Bhutan was admitted to the United Nations, having held observer status for three years. In July 1972, Jigme Singye Wangchuck ascended to the throne at the age of sixteen after the death of his father, Dorji Wangchuck.

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The ngultrum (BTN) has been the currency of Bhutan since 1974. It is subdivided into 100 chetrum (called chetrums on coins until 1979). In 1974, the ngultrum was introduced, replacing the rupee at par. The ngultrum is equal in value to the Indian rupee. India was key in assisting the Bhutanese government as it developed its economy in the early 1960s. When the ngultrum was introduced, it retained the peg to the Indian rupee which the Bhutanese rupee had maintained. The ngultrum does not exchange independently with other nations' currencies but is interchangeable with the Indian rupee. Bhutan has a small economy and the country is underdeveloped. The country is dependent on assistance from India. The main industries are tourism, wood products, cement, processed food, alcohol, fruits, and calcium carbide. The unemployment rate is estimated at 3%. Export products are cardamom, handicrafts, fruits, precious stones, gypsum, and special spices. Bhutan exports electricity to India.

The growth rate for the industrial portion of the economy averages 9%. Import products are machinery, lubricants, rice, and fabrics. Bhutan was the first country to ban smoking and tobacco. Agricultural products are corn, rice, eggs, dairy products, citrus, root crops, and food grains. The economy market is mainly export. Production growth is currently 9.3%. The main industries for Bhutan to develop are hydro-electric power and tourism. In 1974, the Ngultrum was introduced as the official currency of Bhutan. Only 1, 5, 10 Bhutan Ngultrum banknotes were issued. In 1978, 100, 50, 20, and 2 Bhutan Ngultrum banknotes were introduced. During the 1960s the Bhutan government focused on developing the economy. Bhutan started to print its own banknotes in 1985. The latest series of banknotes were introduced in 2006 by the Monetary Authorities in denominations of 1,000, 500, 100, 50, 20, 10, 5, and 1 Ngultrum.

In 1974, aluminum 5 and 10 chetrums, aluminum-bronze 20 chetrums and cupro-nickel 25 chetrums and 1 ngultrum were introduced. The 5 chetrum was square and the 10 chetrum was scallop-shaped. A new coinage was introduced in 1979, consisting of bronze 5 and 10 chetrum, and cupro-nickel 25 and 50 chetrum and 1 and 3 ngultrum. Aluminum-bronze 25 chetrum were also issued dated 1979. The 5 and 10 chetrum have largely ceased circulating. On June 2, 1974,[3] 1, 5 and 10 ngultrum notes were introduced by the Royal Government of Bhutan, followed by 2, 20, 50, and 100 ngultrums in 1978.[3] On August 4, 1982, the Royal Monetary Authority of Bhutan Act was enacted, although the RMA didn't began actual operations until November 1, 1983, and did not issue its own family of notes until 1986.[3] In 2006, the Monetary Authority introduced its latest series of notes, with denominations of 1, 5, 10, 20, 50, 100, 500, and 1000 ngultrum.