Nepal Rastra Bank (NRB) has widened the scope for banks and financial institutions to adjust or merge branches without prior approval from the central bank. The facility, previously available in metropolitan cities, now also applies to sub-metropolitan cities and municipalities as electronic transactions rise.
In a notice issued on Friday, the central bank said employees working at branches that are adjusted or merged must not be removed from service. Banks that close four branches must open one new branch in a rural area under the new arrangement.
Key provisions of the branch merger rules
- Banks and financial institutions can adjust or merge branches in metropolitan cities, sub-metropolitan cities and municipalities without prior NRB approval.
- Employees at branches being adjusted or merged must remain in service.
- For every four branches closed, a bank must open one new branch in a rural area.
The expanded facility gives banks more flexibility to reorganize their branch networks while maintaining a requirement to extend services in rural areas.
