Banks’ penetration in rural areas a must to formalise economy: Finance minister

Finance Minister Yubaraj Khatiwada electronically inaugurating 12 new branches of Nabil Bank in remote rural municipalities of mid- and far-west regions of the country, during a programme in Kathmandu, on Tuesday. Photo Courtesy: Nabil Bank

Kathmandu, July 17

Finance Minister Yubaraj Khatiwada has underscored that banks and financial institutions should play a pivotal role in formalising the economy and for financial inclusion to propel economic growth in the country.

Addressing the inauguration ceremony of 12 branches of Nabil Bank established in remote rural municipalities of mid- and far-west regions of the country simultaneously amidst a ceremony organised by the bank, Finance Minister Khatiwada urged banks to establish branches at local levels within first quarter of this fiscal, as per their commitment.

“From the second half of this fiscal, not only the government but private entities too will have to make all payments through the banking channel, including salaries,” according to Khatiwada.

The finance minister further said that the presence of banks in rural areas will help economic activities thrive in such regions. It will help boost micro, small and medium enterprises, he mentioned.

Citing a large number of inactive (dormant) accounts in banks, the finance minister asked the bankers to make such accountholders active users. He also urged the banks to increase the bankable population under loan schemes.

Nabil Bank has officially started operation of 12 new branches in rural municipalities in Province 5, Karnali Province and Province 7 as an initiative to expand its outreach to remote areas. As per the central bank rules, there should be at least one branch of a commercial bank in each of the 753 local units.

The newly opened branches are located in Aali Taal Rural Municipality in Province 7 (Dadeldhura); Barahataal Rural Municipality in Karnali Province (Surkhet); Bittad Chir Rural Municipality in Province 7 (Bajhang); Sammarimai Rural Municipality in Province 5 (Rupandehi); Tila Rural Municipality in Karnali Province (Jumla); Darma Rural Municipality in Karnali Province (Salyan); Pachal Jharana Rural Municipality in Karnali Province (Kalikot); Palata Rural Municipality in Karnali Province (Kalikot); Pancheshwor Rural Municipality in Province 7 (Baitadi); Ramaroshan Rural Municipality in Province 7 (Achham); Sayal Rural Municipality in Province 7 (Doti); and Turmakhand Rural Municipality in Province 7 (Achham).

The branches were officially opened electronically by Finance Minister Khatiwada and Shambhu Prasad Poudyal, chairman of Nabil Bank, in a programme organised by the bank. The UKaid Sakchyam Access to Finance’s project has supported Nabil to expand its outreach to remote areas.

With the addition of 12 new branches, Nabil Bank now has a network of 74 branches, 115 ATMs and more than 1,500 Nabil Remit agents throughout the country, as per the bank.