Nepal Rastra Bank presses harder for decentralization of banking networks; offers rewards for rural-bound banks

Nepal Rastra Bank has started applying more force over the commercial banks in order to have them expand their banking network at least to those local units where they had earlier committed to expand their services. The latest directives came from the banking and financial institutions Regulation Department of NRB which has brought amendments to its earlier directives making it mandatory for the class A banks to flex their banking muscles by the end of the current fiscal year. Apart from 294 local units that had access to banking facilities till this Asar, the class a banks have expanded their services to only 78 more local units out of their total commitment areas by the end of Falgun. The central bank has also relaxed its earlier provision allowing the banks to open new branch at Kathmandu valley if they begin operations of their branches at at least 2 local units out of 116 remotest of local units where none of them have shown interest for expansion. Earlier, the apex bank had also tried to motivate the commercial banks to reach out to 14 most rural districts of the country by offering an incentives in credit facilities. NRB had then offered to provide credit facility of Rs 50 lakh and Rs 1 crore without any interest if the commercial banks take initiatives to open branches inside the headquarters and outside the headquarters respectively of those 14 most rural districts.