Banks Begin Branch Restructuring; Over 100 Outlets to Close

Commercial banks have started merging and closing branches within metropolitan cities after Nepal Rastra Bank (NRB) allowed them to adjust their branch networks under the monetary policy for the current fiscal year (FY 2025/26).

Within two and a half months since the central bank issued the directive, half a dozen commercial banks have issued public notices to merge or close more than 100 branches.

NRB introduced the provision in its monetary policy for 2025/26 (2082/83 BS) and issued a directive on December 15, 2025, allowing banks and financial institutions to merge branches located within metropolitan cities.

Among the banks, NIC Asia Bank plans to merge 39 branches — the highest among all. Kumari Bank will merge 24 branches, Nepal Investment Mega Bank 18, Prabhu Bank 14, NMB Bank four and Nabil Bank three.

Under NRB’s directive, banks must issue a public notice at least 90 days before closing or merging a branch. Banks have designated nearby outlets to serve customers after the changes take effect.

Banks had long sought permission to shut loss-making branches, citing excessive competition in areas with multiple outlets, rising operating costs and sustained losses. However, NRB has limited the facility to branches within metropolitan cities for now.

NRB spokesperson Guru Prasad Paudel said the policy reflects the growing use of digital transactions in urban areas, reducing customers’ reliance on physical branches.

“We have allowed banks to merge nearby branches only within metropolitan cities, where electronic transactions are high,” Paudel said, adding that further study is needed before extending the policy to rural areas.

Banks have moved to cut operational expenses amid sluggish credit growth and rising non-performing loans that have squeezed profits. Even before the policy was introduced, banks had applied to NRB seeking approval to close certain branches.

A Banking Sector Reform Recommendation Taskforce led by Dr Rewat Bahadur Karki had also recommended allowing banks to adjust their branch networks before the monetary policy for 2025/26 was announced. NRB adopted the measure based on those recommendations.

According to NRB, as of mid-January 2026, there were 6,511 branches in operation nationwide — 5,092 of commercial banks, 1,128 of development banks and 291 of finance companies. In mid-January 2025, the total number of branches stood at 6,500.

Previously, NRB had allowed branch mergers only in cases where banks operated multiple outlets in the same location following mergers and acquisitions of banks.