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Kathmandu: Nepal’s banking sector is undergoing a major transformation as the growing adoption of digital banking has led to the closure of 149 bank and financial institution branches across the country during the current fiscal year. Commercial and development banks operating multiple branches in metropolitan areas have been the most affected.Following the first quarterly review of the current fiscal year’s monetary policy, Nepal Rastra Bank (NRB) allowed banks to merge or consolidate branches located within the same metropolitan city. Under a directive issued on 29 Mangsir 2082 (Nepali calendar), the central bank permitted branch consolidation on the condition that employees would not be laid off or face unnecessary hardship.As part of this policy, 118 branches belonging to seven commercial banks and three development banks were merged in the metropolitan cities of Kathmandu, Lalitpur, Pokhara, Biratnagar, Birgunj, and Bharatpur. By the end of the fiscal year, the total number of bank and financial institution branches reduced by 149 nationwide.According to NRB spokesperson Guru Paudel, the policy was introduced in response to the rapid growth of digital financial transactions. He stated that banks with multiple branches in metropolitan areas were encouraged to consolidate operations where digital banking services are widely used.Paudel added that banks and financial institutions will now establish new branches only where there is genuine operational need and justification, while continuing to strengthen digital banking services.Financial experts believe that as digital banking continues to expand in Nepal, more branch consolidations may take place in the future, although customer convenience and employee welfare will remain important considerations.
