NRB warns incidents targeting BFIs could disrupt financial services

KATHMANDU: Nepal Rastra Bank (NRB) has expressed serious concern about recent incidents targeting banks and financial institutions (BFIs). The central bank warned that such actions could disrupt the delivery of financial services across the country and that action will be taken in accordance with the prevailing law against those who behave irresponsibly or engage in unruly activities.

The central bank said the widespread presence of BFIs at local level, achieved through joint efforts by the Government of Nepal, NRB and the BFIs themselves, has made it easier for the public to access services such as depositing funds, taking out loans, receiving remittances and collecting social security allowances.

NRB reiterated that the primary functions of BFIs include disbursing credit, monitoring projects financed by that credit, and recovering loans in accordance with the Bank and Financial Institution Act, 2073 (2017) and NRB directives.

The bank warned that since BFIs lend using deposits collected from the public, failure to repay credit affects the ability to return deposits and undermines liquidity, and therefore, borrowers must meet their repayment obligations.

To help customers facing difficulties, NRB said it has been facilitating measures such as restructuring and rescheduling loans from time to time.

The central bank also noted that grievance hearing mechanisms exist both at the relevant institutions and at NRB for complaints related to banking transactions, and that arrangements are in place for customers to lodge complaints and seek redress if they feel they have been treated unfairly.

NRB advised all concerned not to engage in activities that disrupt financial services, saying that failure to control unprofessional and unruly behaviour directed at BFIs and their employees will create difficulties in the mobilisation of financial resources.

In a press release on Tuesday, the central bank urged employees in the financial sector to carry out their duties with high morale.