June 29, Kathmandu – During the current fiscal year, banks and financial institutions across Nepal have closed 149 branch offices. Primarily, commercial and development banks have closed many branches located within metropolitan areas. Despite branch closures, banks are not permitted to reduce staff. The Nepal Rastra Bank implemented a policy through the first quarterly review of the monetary policy this fiscal year, mandating that banks with excessive branches in metropolitan areas must restructure or consolidate these branches.
According to the monetary policy, the central bank issued directives on December 14, 2025 (Nepali date 2082 Mansir 29), allowing branch consolidation without staff reductions or causing undue hardship. Consistent with this policy, in metropolitan areas such as Kathmandu, Lalitpur, Pokhara, Biratnagar, Birgunj, and Bharatpur, seven commercial banks and three development banks have merged a total of 118 branches. Overall, total bank and financial institution branches have decreased by 149 as of mid-April this fiscal year. Nepal Rastra Bank spokesperson Guru Paudel stated, “With increased use of digital financial transactions, the policy targets banks and institutions with many metropolitan branches for consolidation. Post-implementation, 10 banks and financial institutions have merged 118 branches. Branches remain only in locations with relevant demand and operational justification.”
During the first 10 months of this fiscal year, commercial banks have closed 141 branch offices, Paudel added. “When banks restructure branches, customer service should not be compromised and staff reductions are not allowed.” He clarified, “Employees cannot be laid off nor transferred to inconvenient locations for dismissal purposes. So far, no such issues have arisen during branch consolidation.”
Paudel also emphasized that staff cannot be relocated to remote locations causing difficulties following branch closures. The central bank is prepared to intervene if such conflicts occur and employees may file complaints regarding such matters. Even before this consolidation policy, the number of bank and financial institution branches was declining. In the first 10 months of the current fiscal year, commercial banks closed 141 branches, development banks closed 15 branches, while finance companies established two new branches. The branch reduction is due to both consolidation policies and mergers, he explained.
One banking professional noted, “Reduced customer footfall for in-branch financial transactions has increased operational costs, leading the central bank to introduce this consolidation policy. This will lower expenses for banks and promote digital transactions as well.”
Following the central bank’s branch consolidation policy, NIC Asia Bank has closed the highest number of branches, totaling 44. Kumari Bank consolidated 24 branches while Nepal Purchasing Mega Bank merged 18 branches. In the past six months, Prabhu Bank reduced 12 branches, Everest Bank one, Prime Commercial Bank seven, and NMB Bank four branches in metropolitan areas. Similarly, Mahalaxmi Development Bank merged four, Muktinath Development Bank two, and Saptakoshi Development Bank two branches. As a result of consolidation and mergers, a total of 149 branches have closed during the first 10 months of this fiscal year.
At the end of June, commercial banks had 5,599 branches, which declined to 4,963 by mid-April. Similarly, development bank branches decreased from 1,132 in December 2025 (2082 Asar) to 1,119 in mid-April 2026 (2083 Vaishakh). However, finance companies’ branch numbers rose slightly from 291 to 293 during the same period.
The central bank’s branch consolidation policy mandates prior approval for branch closures, relocations, or mergers. A provision added last December permits financial institutions to self-decide branch consolidation within metropolitan areas, considering the growth of electronic transactions and excessive branches. Consolidation of branches belonging to government entities or public institutions requires written permission.
Stakeholders must be notified at least 90 days prior to consolidation via national daily newspapers, institutional websites, and branch notice boards.
When consolidating two or more branches, customers wishing to repay loans early or discontinue services may do so without fees or penalties. Moreover, consolidated branch details must be submitted to the central bank within three working days.
