The Nepal Rastra Bank (NRB), the central monetary authority, has roped in state-owned Rastriya Banijya Bank to manage the government’s accounts and financial transactions in five different locations of the country. With this, the central bank has outsourced all works related to management of the government’s accounts and financial transactions to commercial banks.

One of the tasks of the central bank is to manage government accounts and transactions related to revenue collection and public expenditure. The NRB’s Banking Office located in Thapathali conducts these tasks. This office also coordinates with NRB’s branch offices located in seven different places of the country to perform these tasks.

NRB’s branch offices are located in Biratnagar, Janakpur, Birgunj, Pokhara, Siddarthanagar, Nepalgunj, and Dhangadhi.

Previously, the NRB was managing government’s accounts and financial transactions on its own wherever it had its presence. But a few years ago, the NRB hired Rastriya Banijya Bank to perform these operations in the Kathmandu Valley. Then around two years ago state-controlled Agricultural Development Bank Limited was appointed to perform these works in Biratnagar and Siddarthanagar.

Come July 16, works related to management of government’s accounts and financial transactions in five remaining places—Janakpur, Birgunj, Pokhara, Nepalgunj, and Dhangadhi-where the NRB has presence, will be outsourced.

“We have appointed Rastriya Banijya Bank for the purpose as it is a state-owned financial institution,” a senior NRB official said on condition of anonymity.

With the appointment of this bank, the NRB has so far hired 11 state-owned and private commercial banks, including Everest, Global IME and Nepal Bangladesh, to manage government’s accounts and financial transactions.

“We have been gradually roping in commercial banks to perform these tasks based on demand made by financial institutions,” said the source. “But all of these banks have to report to the NRB and work in coordination with us. Based on this, we prepare weekly reports.”

Management of government’s accounts and financial transactions entails three basic tasks. First is maintaining an account to manage the income generated by the government from different sources, such as revenue offices and other agencies which collect various fees and duties.

Second is management of the expenditure account. This task includes management of funds allocated through the annual budget. Third is management of accounts of local bodies, which includes management of transactions related to revenue collection and expenditure.

One of the benefits of outsourcing these tasks is that it frees up employees at the NRB to execute other tasks.

Many branches of the NRB have dedicated three to four staff to perform these tasks. These employees can now be deployed to conduct other works.