August 21, 2022 | Investopaper
As of Ashad’s end, 2079 BS (Mid-July, 2022), 4.49 crores deposit accounts have been opened in banks and financial institutions. This is the number of accounts opened only in commercial banks, development banks, and finance companies. This number will be higher if the accounts opened in the MFI are also included. The number of bank accounts is more than the total population of Nepal. According to the Central Statistics Office, the total population of Nepal is almost 3 crores.
Just because there are more bank accounts than the population does not mean that all Nepalis have access to bank accounts. An individual can also open an account in more than one bank and financial institution. That is why there are more bank accounts than the population.
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Banks & Financial Institutions (BFIs) In Nepal
With the introduction of the merger by-laws, the number of banks and financial institutions (BFIs) has gradually declined in Nepal. Until the end of Ashad, 2079 BS, the number of Banks and Financial Institutions has declined to 126. The total number of BFIs (A, B & C) stood at 60. The ‘B’ class development banks and ‘C’ class finance companies are in danger of extinction. Likewise, the ‘D’ class microfinance companies are also undergoing merger/acquisition aggressively.
Altogether 26 commercial banks, 17 development banks, 17 finance companies, and 66 microfinance are currently operating (as of Mid-July 2022) in Nepal. Several development banks and finance companies have entered into a merger/acquisition agreement with commercial banks. Therefore, the number of BFIs is expected to decline. The central bank’s initiative to induce a big merger (merger of commercial banks) is likely to bring the number of financial institutions further down.
Number of BFIs And Their Branches
Until Mid-July, 2022, Commercial Banks have the highest number of branches (among A,B & C class institutions) of 5,009 while development banks and finance have 1,118 and 267 branches respectively. Similarly, microfinance institutions have 5,134 total branches.
The table below shows the number of BFIs including the ‘D’ class microfinance and their branches.
|Banks/BFI Class||No. Of BFIs||No. Of Branches|
|Commercial Banks (A)||26||5,009|
|Development Banks (B)||17||1,118|
|Infrastructure Development Bank||1|
Branches Of BFIs Based On The Province
Bagmati State has the highest penetration in terms of the number of branches of BFIs. Altogether 3,003 branches of BFIs are operating in Bagmati State. However, Karnali Province has the lowest banking exposure with only 455 banking branches available. Out of which, 232 branches are of microfinance companies.
The table below shows the branches of BFIs in the different provinces (As of Mid July 2022).
Presence Of Commercial Banks at Local Level
Commercial banks have reached 750 out of 753 local levels formed after the country’s transition to federalism. After the launch of a program called ‘Bank Account for All Nepalis’, the number of bank accounts has increased due to increased financial literacy. In four states, banks have reached all local levels.
The table below shows the presence of commercial banks at the local level [ As of Mid-July 2022].
|Province||Number of Local Levels||Local Levels Having Bank Branches|
Deposit And Loan Accounts On BFIs
Altogether, 4.49 crores deposit account exists in the A, B, or C class banks. Out of this, commercial banks have the largest deposit accounts of 3.88 crores. Likewise, 18.29 lakh borrowers have taken loan facilities from these BFIs.
The table below presents the number of Deposit and Loan Accounts [As of Mid-July, 2022]:
|BFIs||No. of Deposit Accounts||No. of Loan Accounts|
Branchless Banking Centers And Customers
At current, the BFIs are operating 1,526 branchless banking centers. There are currently 283,480 branchless banking customers in Nepal.
|BFIs||Number of Branchless Banking Centers||Number of Branchless Banking customers|
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Mobile Banking, Internet Banking, And ATM Users
A, B, and C Class BFIs have opened in a total of 4,602 ATMs out of which commercial banks occupy 4,235 ATMs. The number of mobile banking users has surged rapidly in recent times. Altogether 1.83 crores customers are currently taking banking services through the use of mobile banking. Likewise, 16.84 lakh users are involved in the internet banking service.
See the current data (Mid-July 2022) related to mobile banking, internet banking, and ATMs in the table below:
|No.of Mobile Banking Customers||16,091,464||2,114,559||101,232||18,307,255|
|No. of Internet Banking Customers||1,279,475||394,563||10,272||1,684,310|
|No. of ATMs||4,235||323||44||4,602|
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Debit Cards, Credit Cards, And Prepaid Cards
With the banks creating awareness and providing various discounts on the use of cards for day to day transactions, there is decent growth in the number of cardholders. As of Ashad’s end 2079 BS [Mid July 2022], a total of 1.08 crore customers are users of debit cards while 2.38 lakh bank customers use credit cards. Similarly, 1.05 lakh customers are involved in the usage of prepaid cards.
|No. of Debit Cards||10,274,413||538,672||43,272||10,856,357|
|No. of Credit Cards||238,794||–||–||238,794|
|No. of Prepaid Cards||105,121||–||–||105,121|
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