Nepal’s banking sector is coming under increasing pressure following a series of attacks on bank employees, raising serious concerns about financial stability, depositor confidence, and the broader economy.
Banks and financial institutions (BFIs) say repeated acts of violence against staff – particularly those involved in loan recovery and fieldwork – are creating an atmosphere of fear and uncertainty. These incidents are not only undermining day-to-day operations but are also beginning to threaten trust in the financial system itself.
In response, banks and financial institutions convened a meeting on Wednesday under the coordination of the Nepal Bankers’ Association (NBA) to discuss how to address the growing security risks faced by their employees. The meeting concluded with a decision to urge the government and security agencies to take immediate and concrete steps to ensure staff safety.
Representatives from Class A, B, C, and D financial institutions agreed to formally raise the issue with the Prime Minister Sushila Karki, seeking government support to prevent further attacks and restore a secure working environment.
The urgency of the situation was underscored after the Chief Executive Officers of Nepal Investment Mega Bank (NIMB) Jyoti Pandey and NIC Asia Bank Sujit Kumar Shakya submitted formal complaints to the NBA following attacks on their employees.
NBA President Santosh Koirala said the association held in-depth discussions on the issue and agreed on the need for a unified response. “We have decided to seek time with the Prime Minister, particularly to highlight the risks faced by staff involved in loan recovery and field assignments, and to press for concrete protective measures,” he said.
Employee unions across the banking sector have also warned that continued violence could have long-term consequences.
Former Nepal Rastra Bank (NRB) Executive Director Nar Bahadur Thapa said such incidents pose a direct threat to the stability of the financial system and could eventually create systemic risk.
Questioning how such behavior has become emboldened, Thapa noted that some individuals appear to be using violence as a way to become popular and grab public attention. He stressed that both the government and the central bank must remain alert to actions that encourage distrust in the banking system or incite attacks against it.
“If the government fails to treat this issue seriously, the consequences could go beyond loss of confidence among depositors and destabilize the entire financial sector,” Thapa warned.
While attacks on bank employees have been increasing for several years, the most recent incident occurred on Saturday at NIMB’s Ghorahi branch in Dang district. Employees carrying out official loan recovery duties were physically assaulted by an unruly group.
Similar attacks were reported some days earlier at NIC Bank’s Itahari branch and, before that, at Jyoti Bikash Bank in Saptari.
Condemning the violence, the Nepal Investment Mega Bank Employees’ Union said bank staff are becoming increasingly vulnerable and called on Nepal Rastra Bank to intervene. Union President Shivahari Bhandari said the Ghorahi attack was carried out with clear intent to cause serious harm and should not be viewed as an isolated incident.
“This is not just an attack on one bank or a handful of employees,” he said. “It is a direct challenge to the rule of law, financial discipline, and the basic values of a civilized society.”
According to Nepal Rastra Bank data, as of January 5, total deposits in the banking system stood at approximately Rs 7.64 trillion, while total lending amounted to Rs 5.71 trillion. The resulting credit-to-deposit (CD) ratio of about 73.9 percent suggests that banks have sufficient liquidity, but demand for loans remains weak.
Economists say this imbalance is troubling. While growing deposits indicate continued public trust in banks, sluggish lending reflects hesitation among borrowers and investors amid economic uncertainty.
Banks and Financial Institutions – as financial intermediaries – play a crucial role in keeping the economy moving by financing businesses, supporting industries, and creating jobs.
When loans are not repaid – or when lawful recovery efforts are obstructed – it puts depositors’ savings at risk. One commercial bank CEO, without wanting to be named said that repeated attacks on banks have fueled concerns that certain groups may be deliberately trying to weaken the banking system, similar to what has happened in cooperative sector few years back.
Other bankers also expressed alarm over rising threats, verbal abuse, and calls to default on loans, particularly on social media and public platforms.
“The silence of regulators and the Home Ministry has been deeply disappointing,” said another banker. “Protecting offenders, politicizing incidents, and placing undue pressure on field staff are only making matters worse.”
Employee unions of the banks and financial institutions have demanded strict legal action against individuals, who resort to violence, take the law into their own hands, or attempt to destabilize the banking system.
Although regulators and bankers broadly agree that these attacks threaten depositor confidence, credit flow, and overall financial stability, bank employees feel the government’s security apparatus has yet to respond with the seriousness the situation demands.
Meanwhile, Nepal Rastra Bank has formally asked the government to provide security assurances and urged law enforcement agencies to take firm action to protect bank employees performing their duties lawfully.
NRB spokesperson Guru Paudel said the central bank is always open to addressing borrowers’ grievances through proper legal channels, but physical attacks undermine the rule of law and put the entire financial system at risk. He added that intimidation during lawful loan recovery damages transparency and public trust.
The Nepal Bankers’ Association (NBA) estimates that the banking sector directly employs more than 50,000 people and supports many more indirectly. Disruptions to bank operations, therefore, have far-reaching economic consequences.
Thapa also cautioned against the spread of misleading narratives on social media, such as unfounded claims about loan waivers, saying they weaken financial discipline and complicate legitimate recovery processes.
He warned that continued instability could lead to reduced long-term deposits, lower lending to productive sectors, a widening credit-deposit gap, and slower economic activity overall.
While the recent incidents have not yet triggered an immediate systemic crisis, Thapa said they should be taken as a clear warning.
Strengthening the security of bank employees, resolving credit disputes strictly through legal means, and improving financial literacy, he said, are essential measures for protecting depositors’ interests and ensuring long-term stability of the banking sector.
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