Nepal Rastra Bank Eases Branch Mergers in Cities, but Requires a New Rural Branch for Every Four Clo

Kathmandu: Nepal Rastra Bank (NRB) has amended its 2082 Unified Directive to let commercial banks, development banks and finance companies merge branches in urban and peri-urban areas on their own, without prior central bank approval. In metropolitan cities, where digital payments are expanding and other financial institutions already operate, institutions may consolidate branches freely. In sub-metropolitan cities and municipalities, a merger within a one-kilometre radius must leave at least one branch standing.

The relaxation comes with a condition aimed at financial inclusion. For every four branches closed through mergers, the institution must open one new branch in a rural ward that has no bank or financial institution branch and report it to NRB’s supervision departments. Closing or relocating branches in rural municipalities and rural areas still requires prior NRB approval.

Institutions must publish a notice of at least 90 days in a national daily, on their websites and at the branch. Customers must be allowed to repay loans or close services without penalty fees. Employees cannot be dismissed because of a merger and must be reassigned. Mergers must also not harm financial access in the area. Institutions must update NRB’s Reporting Portal within three working days of a merger. Urban, peri-urban and rural classifications follow the National Statistics Office’s DEGURBA report.

The circular also allows branches to move within the same ward on notice to NRB within seven days. Head offices may change address after NRB approval, with amendments to their charter documents.