Kathmandu. Due to the policy of Nepal Rastra Bank, the number of branches of banks has decreased. In one year, 182 branches of banks have decreased.

In November last year, the Rastra Bank had adopted a policy to allow the merger of branches of banks and financial institutions. Due to this, the banks had accelerated the merger of branches. According to the Nepal Rastra Bank, only 164 branches of commercial banks have been merged till mid-July.

Similarly, 23 branches of development banks have been merged. During this period, finance companies have expanded 3 branches.

The Nepal Rastra Bank (NRB) on December 29 had introduced a provision to merge the branches of banks and financial institutions with a strategy to reduce the use of digital banking and reduce operating expenses. Due to which banks have started reducing physical branches.

According to the data of Nepal Rastra Bank, the number of branches of banks and financial institutions has decreased from 6,526 in mid-July 2082 to 6,334 as of mid-July 2083.

The banks, which had given priority to branch expansion in the previous years, have merged the branches that are less transacted and close to each other. As a result, the branches of the banks have decreased.

There has been a change in the old trend of branch expansion in the banking sector. In the previous years, there was a wave of increasing the number of branches in the banks. Now, instead of increasing the number of branches, banks are adopting a strategy of managing the available branches, reducing expenses and expanding services through technology.

The main reason for the decline in bank branches is the expansion of digital banking. In recent years, transactions through mobile banking, internet banking, QR payments, and digital wallets have increased.

The compulsion of customers to reach the branch for normal banking transactions has decreased. Bankers say that the dependence on branches has reduced as money transfer, bill payment, banking services through mobile and internet to QR payment are possible through digital medium.

Branch operations are expensive for banks. Banks are turning to reduce branches because of low turnover due to rent, staff, security, electricity and other administrative expenses.

The Nepal Rastra Bank (NRB) had last November made a provision allowing banks and financial institutions to merge and merge their branches within the metropolis. The NRB had amended the provisions relating to the closure, transfer or merger of branches and offices of licensed institutions.

According to the amended directive of the Rastra Bank, banks and financial institutions are not allowed to close, transfer or merge any branch or any office without the prior approval of the Rastra Bank.

“However, when electronic payment transactions are increasing in the metropolitan area and there are a significant number of branches of banks and financial institutions, the concerned banks and financial institutions will be able to merge or merge the branches by taking their own decision,” the directive said. The directive states.

However, the Rastra Bank had set some conditions for the integration of such branches. The written consent of the concerned organization is mandatory for the integration of the branches established targeting government bodies or public institutions, and the notice should be published in the national level daily newspaper, website and branch notice board at least 90 days in advance to inform the customers and other stakeholders before the branch merger.

Similarly, in the event of merger of two or more branches, if the customers of the merged branches want to repay their loans or close other services, such facilities should be provided without any kind of fee. According to the same conditions, the banks and financial institutions concerned should submit the details as per Schedule 14.2 to the Rastra Bank within three working days. According to the same conditions, the banks have merged their branches.