14 banks sign pact to expand rural accessFourteen commercial banks of the country have joined hands with Sakchyam, an access to finance initiative of UKaid, to establish 57 new branches in rural municipalities of Karnali Province and Province Number 5 and 7.
Fourteen commercial banks of the country have joined hands with Sakchyam, an access to finance initiative of UKaid, to establish 57 new branches in rural municipalities of Karnali Province and Province Number 5 and 7.
The agreement was signed on Thursday amid a ceremony. The newly signed partnership embodies UKaid and Sakchaym’s resolve to support Nepal’s commitment to establish commercial bank branches in all 753 municipalities in the country as part of decentralisation.
These 57 branches will ensure that even the remotest municipalities in the country will have a bank presence. The new remote branch locations include—Jhimruk and Naubahini in Pyuthan district, Sukidaha and Lungri in Rolpa district of Province Number 5; Namkha and Tajakot in Humla district, Chharka Tangsong in Dolpa district, Mugumkarmarag in Mugu district of Karnali Province and Kanda in Bajhang district, Swami Kartik in Bajura district and Lekam in Darchula district of Province Number 7.
Several of these locations are inaccessible by road and can only be reached on foot after several hours of walking. “Through this support, we are expanding the reach of banking services to under-served rural populations, energizing economic development, as well as enabling local governments to receive federal funding and undertake local financial management functions. Additionally, we are also hopeful that social security payments will be disbursed through these bank branches,” said Baljit Vohra, team leader of Sakchyam. “These branches will also open avenues for over 1 million individuals along with micro, small and medium sized enterprises to access full-fledged commercial banking services right at their doorstep.” Speaking at the programme, Nepal Rastra Bank Governor Chiranjibi Nepal said the central bank had urged the banks to expand branches through last fiscal year’s monetary policy and that banks were fulfilling on their promise to do so by participating in such initiatives.
“We are glad to note that the banking community has risen to the need of the hour by committing to establish a branch presence in all the municipalities across the country,” said Nepal.
Realising the potential challenges while establishing branches in remote locations, a stakeholders’ discussion session on “Banking in the New Federal Structure: Challenges and Way Forward” was also organised during the signing ceremony.
Addressing the various concerns raised by banks’ CEOs, Uttar Kumar Khatri, joint secretary of Financial Sector Management Division of Finance Minsiter said, the ministry was working towards ensuring proper security and infrastructure to facilitate banks to open branches at the local units. “We have taken into account all the concerns raised by the banks and will work towards addressing these issues collectively,” said Khatri.