Kathmandu. Nepal Rastra Bank (NRB) has amended the provisions related to the adjustment and merger of branches of banks and financial institutions. According to the amended provision, banks and financial institutions can adjust the branches within metropolitan cities, sub-metropolitan cities and municipalities by fulfilling certain conditions. However, while adjusting the branches, there is a provision to maintain financial access in the rural areas.

This provision has been made by amending point number 2 of Directive No. 14 of the Integrated Directive-2082 issued for class ‘A’, ‘B’ and ‘C’ licensed banks and financial institutions from the Nepal Rastra Bank.

According to the amended provision, the branches within the metropolitan city can be merged or merged as the electronic payment transaction is increasing and the branches of banks and financial institutions are significant in urban areas. Similarly, the branches within the sub-metropolis and the municipality can also be adjusted by fulfilling the specified conditions.

While adjusting the branches, only the branches in urban and urban areas can be adjusted. At least one of the branches operating within a distance of one kilometer will have to be maintained and other branches within the same distance will have to be adjusted.

Along with the integration of branches, the Rastra Bank has also made arrangements to expand financial access in rural areas. According to the revised directive, banks and financial institutions will have to open a new branch in a ward in a rural area where no bank or financial institution has a branch after merging and closing four branches.

The details of this should be submitted to the Bank and Financial Institutions Regulation Department of the Rastra Bank and the concerned supervision department. However, branches or other offices in rural municipalities and rural areas cannot be closed, transferred or merged without the prior approval of the Rastra Bank.

Similarly, prior to the merger of the branches, the stakeholders should be informed at least 90 days before the merger should be published in the national level daily newspaper, the website of the concerned bank and financial institution and the notice board of the branch to be adjusted.

If the customer wants to repay his loan or close other services due to branch adjustment, such facility will be provided without any kind of fee. This arrangement seeks to ensure that the customer does not face any additional financial burden during the closure or consolidation of the branch.

The amended provision makes it clear that the employees working in the concerned branch cannot be removed from service due to branch adjustment. After the branch adjustment, such employees will have to be transferred to the nearest branch or other branch on the basis of priority and consent.

Similarly, it should be ensured that the financial access of the concerned area will not be adversely affected while adjusting the branches. It has also been made that the details should be updated on the reporting portal of the Rastra Bank within three working days of the branch merger and the details as per Schedule 14.2 should be submitted to the concerned department.

According to the revised directive, if a branch has to be shifted within the same ward of the metropolis, sub-metropolis and municipality and in the case of a rural municipality, within the same rural municipality, the transfer can be done on the basis of the decision of the board of directors. The information about such transfer has to be given to the Rastra Bank within seven days.

Similarly, if you want to change or transfer the address of the central or registered office, you will have to get the approval of the Rastra Bank. In addition, according to the prevailing law, necessary amendments in the Memorandum of Association and Regulations have to be completed.

The new system aims to make it easier for banks and financial institutions to adjust duplicate branches in urban areas and address the lack of financial access through the expansion of new branches in rural areas. In addition, emphasis has been laid on protecting the interests of customers, employment security of employees and maintaining transparency in the branch adjustment process.