Kathmandu. NRB is currently busy preparing monetary policy. Issues ranging from the easy and successful landing to the cost reduction due to the impact of COVID-19 on business have become the main agenda of monetary policy. NRB has made Big Merger the main basis for reducing the expenses of banks and financial institutions. Meanwhile, the bankers have demanded the NRB, which is formulating monetary policy, to facilitate the process of closing branches to reduce expenses.

Bankers themselves have been saying in public forums that the best option to reduce spending is to reduce branches and the big merger itself as the overall financial system is in crisis due to Kovid. In the current fiscal year's monetary policy, NRB has made arrangements to provide various facilities to the merging banks and financial institutions.

The forthcoming monetary policy will also use the big merger as a perfect weapon to cut the expenses of banks and financial institutions, while financial institutions have taken interest cuts on deposits, dismissal of contract and outsourced employees and cuts in various advertisements. According to the NRB, there are currently 5,694 branches of banks and financial institutions in operation. Banks and financial institutions have 68,000 employees. Of them, 4,000 employees are on contract. The number of employees in outsourcing is not counted.

The backers have said that the current situation needs to be balanced by cutting interest rates on deposits.

Interest rates have to be lowered for the 7 percent economic growth set by the government through the budget. Chairman of Nepal Investment Bank, Prithvi Bahadur Pandey, said that it would be effective if the interest rate on savings account deposits was reduced from 3 percent to 6.5 percent. NRB Deputy Governor Chintamani Shiwakoti said merger was the best way to cut costs. NRB has been providing various facilities by encouraging mergers and will continue to pursue the same policy.

The Nepal Bankers Association has also demanded that the necessary process be simplified to reduce the number of bank branches in order to cut costs while making suggestions for the coming fiscal year. Banks are preparing to close branches where there are more and cut interest rates on deposits from July. Also, mergers can be a good way to cut costs.