Strike-hit districts face cash crunch as bank branches shut operation

KATHMANDU, Sept 28: With Madhes-based parties targeting bank and financial institutions (BFIs), banking and financial activities in Tarai districts have come to a grinding halt.

The closure of branch offices of BFIs is creating shortage of cash in around 15 districts of Tarai which is reeling under protest of different Madhes-based parties for the last one and half months."Almost all the branch offices of BFIs in these districts have been closed after the agitating parties started issuing threats. Even those offices near the East-West Highway have not been able to receive cash in recent days," Upendra Poudyal, president of Nepal Bankers' Association (NBA), told Republica.

Sunsari, Morang, Saptari, Siraha, Sarlahi, Dhanusha and Mahottari are among the worst-hit districts. Likewise, Bara, Rautahat, Parsa, Nawalparasi, Rupandehi, Kapilvastu, Banke and Kailali are also affected due to the strike enforced by the agitating Madhesi and Tharu parties.

According to data of Nepal Rastra Bank (NRB), there are a total of 996 branch offices of 'A', 'B', 'C' and 'D' class BFIs in these fifteen districts.

Though there is no exact data on how much deposit is mobilized in these districts, NBA Poudyal estimates that Tarai accounts for 30 percent of total deposit collection. "Loan mobilization and deposit collection by these BFIs in these districts has come to a halt," he added.

The strike has made things difficult for business firms and government agencies as well as general public. Even ATMs are not operating as BFIs have been unable to replenish cash in the machines.

Many remittance-receivers have not been able to withdraw money as the branches of BFIs as well as outlets of remittance companies have remained closed.

NRB Spokesperson Trilochan Pangeni said that the NRB was reluctant to replenish its vault in Tarai districts due to worsening security season. "We, however, will send cash once the security situation improves," added Pangeni.

Due to closure of banks, many people in affected districts are reaching nearby districts like Udaypur, Sindhuli, Makwanpur and Chitwan to withdraw their deposits. "The withdrawal pressure is increasing in our branch office as people from the strike-hit districts like Siraha and Dhanusha are also coming to get the cash as the branches of BFIs there are closed for past one and half months," branch manager of a commercial bank at Gaighat, Udaypur, told Republica.

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