Many people residing in remote parts of mid-western Nepal still do not have access to banking services, despite a proliferation of banks and financial institutions in different parts of the country.

Surkhet Road in Nepalgunj, an urban centre in mid-western Nepal, has been nicknamed ‘bank road’ because a large number of state-owned and private banks are located on the road.

Banks and financial institutions have also sprouted in Kohalpur and Khajura in this part of the country, but people living in remote places, like Bagauda, are yet to gain access to banking services.

“There are banks in almost every house in Nepalgunj,” Rajendra Kumar Sharma, a resident of Holiya-5, Banke, said. “But here, we have to walk for almost four hours to reach the nearest bank branch. The concentration of banks in urban centres has limited our access to banking services.”

There are 175 branches of commercial banks in Nepal’s mid-western region, but there are only 17 operating in Karnali, the country’s least developed zone.

Kalikot district in Karnali, for instance, has three bank branches, which means there is one bank to serve 49,790 persons.

Similarly, only two commercial banks have expanded their network to Mugu district, and each of these branches serves 30,055 people. As per the statistics, there is one bank for every 24,855 persons in Karnali zone.

Banking services have not been fully restored in the country’s mid-western region. Many branches that pulled out during the decade-long Maoist conflict are yet to resume services from these areas.

In a bid to expand banking services in rural areas, Nepal Rastra Bank (NRB) has made it mandatory for financial institutions to open at least one branch in a rural area for every branch they open in an urban area, said the central bank’s Regional Director Guru Prasad Paudel. “But banks are reluctant to open branch offices in less developed areas because of lack of basic infrastructure and security,” added Paudel.

Currently, Humla district in Karnali zone has only three bank branches, while Banke and Dang districts have offices of 72 banks and financial institutions. But again, even in districts like Dang, banks have mushroomed in urban areas like Tulsipur and Ghorahi while people living in remote parts of the district have to walk for hours to get to a bank. “Lack of banks and financial institutions in rural areas has caused inconvenience to people who have to deal with different government and private offices,” said Kanaiya Lal Vaidya, a businessman of Banke.

NRB statistics show that Dailekh has nine branches of commercial banks, or one bank for 30,800 customers. Salyan has 10 branches, and each has to serve an average of 25,500 individuals.

Nandalal Baishya, president of the Nepalgunj Chamber of Commerce and Industry, said, “Economic activities in rural areas, including investment in agriculture and livestock, have been shrinking lately because of lack of adequate banks and financial institutions.”