Nepal’s central bank has faced criticism after it decided to close a licensed digital bank, raising questions about its commitment to digital transformation. The move has caused concern among financial experts, business leaders, and customers who see digital banking as the future of financial services in the country.
The closure of the bank has sparked debate because it directly contradicts Nepal Rastra Bank’s own push for digital transformation. For years, NRB encouraged banks and financial institutions to adopt digital tools, improve mobile banking services, and support a cashless economy.
Growing Importance of Digital Banking in Nepal
Digital banking has been expanding rapidly in Nepal. With mobile banking apps, QR code payments, and online services, people have enjoyed easier access to financial tools. More than 17 million users are registered in mobile banking systems, showing a strong shift toward digital financial services.
For a country where rural areas still lack enough physical bank branches, digital banking was seen as the perfect solution. It reduced costs, saved time, and opened access to financial services for more people. Closing a digital bank, therefore, looks like a step backward in Nepal’s digital journey.
Trust Issues Between Regulators and Investors
One of the biggest concerns is the message this closure sends to local and international investors. If a digital bank with regulatory approval can suddenly be shut down, it creates fear about policy stability. Businesses and startups depend on clear, reliable regulations. Frequent changes or sudden reversals discourage innovation and investment.
Financial experts argue that Nepal must balance strict oversight with supportive policies. While ensuring customer safety and preventing risks is important, regulators must also encourage new ideas in the financial sector.
The closure not only affects customers of the bank but also slows down the momentum of Nepal’s digital economy. The government has been promoting initiatives like e-commerce, fintech solutions, and digital wallets. A strong digital banking system was expected to support all these efforts.
Call for Policy Clarity and Stronger Reforms
Industry leaders, including members of the Federation of Nepalese Chambers of Commerce and Industry have urged NRB to provide a clear roadmap for digital banking. They believe Nepal cannot afford to send mixed signals about financial reforms.
Experts also recommend that instead of closing banks, regulators should strengthen monitoring systems, provide technical support, and ensure fair competition in the digital space. A transparent regulatory environment would attract more fintech companies and allow safe innovation.
Nepal’s ambition to build a cashless economy depends heavily on trust, innovation, and strong digital infrastructure. The central bank’s decision to close a digital bank has created confusion at a time when the country should be embracing digital tools more than ever.
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