Flexible Regulations for Disaster-Hit Areas: MFIs Allowed to Relocate Branches Without Prior Approval, Relief for Document-Loss Customers

Kathmandu — In a move to ensure the uninterrupted flow of financial services in regions devastated by natural disasters, such as Rasuwa, the Nepal Bank has adopted a flexible regulatory approach. 'Class D' microfinance institutions (MFIs) that have suffered structural damage or find it difficult to operate due to floods and landslides can now relocate their branches or merge them with nearby existing branches without needing prior approval from the central bank. Under this newly amended directive, institutions are simply required to notify Nepal Rastra Bank within seven days of any such branch relocation or adjustment.

Alongside this, the central bank has issued clear instructions to all financial institutions to facilitate customers who have lost essential banking documents in the calamity. Citizens who lost their checkbooks, ATM cards, mobile devices, or other necessary paperwork in the disaster will no longer be barred from accessing banking services. Financial institutions have been instructed to verify customer identities using existing signatures on file, photographs, and system records to provide immediate financial assistance.

This relaxed framework applies across the board to Class 'A', 'B', 'C', and 'D' financial institutions—ranging from commercial banks to microfinances. This timely intervention by the central bank is expected to bring substantial relief to disaster survivors who have lost their homes and property, enabling them to withdraw funds and conduct necessary financial transactions without bureaucratic hurdles.