Prime Minister Pushpa Kamal Dahal on Saturday directed the chiefs of security agencies to pay attention to the security of employees of the banks and financial institutions (BFIs). With cases of BFIs employees getting attacked and manhandled on the rise in recent days as some people have been inciting anti-banking activities,  PM Dahal instructed the security chiefs to arrange proper security for BFIs and their staff. Of late, financial institutions are in the news for the wrong reasons. While there have been protests against microfinance institutions (MFIs) for their alleged cases of exploitation of borrowers, BFIs are also in the line of fire for higher interest rates. The controversial businessman and medical college owner Durga Prasain has  launched a loan waiver campaign and has openly called his followers not to repay their debts and attack BFIs' staff if they come for loan recovery. Addressing a public rally in Jhapa in late February, Prasain called for a smear campaign on the CEOs and employees of BFIs. Subsequently, incidents of physical attacks against the employees of BFIs and MFIs were reported in various parts of the country. The BFIs' staff in Jajarkot, Mawakanpur, Myagdi, Sunsari, Udayapur, Kapilvastu, Rupandehi, and Kaski districts, among others, have been physically attacked and assaulted in past two weeks.

This has forced the umbrella organizations of BFIs to issue strongly worded statements in which they have warned that they would be forced to discontinue the banking service if such activities continue.

In a joint statement on Friday, the Nepal Bankers’ Association, Development Bankers’ Association of Nepal, Nepal Financial Institutions Association, and Nepal Microfinance Bankers Association said their employees have been physically assaulted, and offices padlocked and ransacked in more than half a dozen districts. Condemning such acts, these associations also called for legal action against those responsible for instigating such attacks, indicating Prasain. They also warned of discontinuing the banking service for the safety of their staff. As Prasain called for a smear campaign against bank employees, bankers said that it has created an environment of fear among the bank employees. A banker said that the bank employees have been terrified by the campaign. “That’s why we had demanded the security be provided to our offices and staff,” said the banker. Confederation of Banks and Financial Institutions Nepal, a grouping of bank promoters also condemned the obstructive activities to provide banking services and asked the government to ensure law and order. According to a senior official of the Home Ministry, after the bankers submitted a memorandum demanding security for their offices and staff, the Ministry issued a circular in the name of District Administration Offices to enhance vigilance and security around the offices of BFIs. But the official also said that only maintaining law and order would not solve the current rage against the banking sector.  “This is the result of the economic problems that the country is going through. So, it is necessary for the Nepal Rastra Bank and other regulatory agencies to address the genuine concerns of the bank customers,” he said. Nepal's economy is facing deeper troubles since the start of the Covid-19 pandemic in early 2020. The country’s economy sank to negative growth of 2.4 percent in the fiscal year 2019/20 because of Covid-related restrictions. Even though there was a slight recovery after the easing of restrictions later on, the economy has been facing a series of problems. In FY 2021/22, problems of depleting foreign exchange reserves, and widening balance of payment (BoP) gave way to a liquidity crunch in the banking sector. As a result, bank loans started to become costlier which affected the borrowers’ repayment capacity badly. “Not only in Nepal, but we have also seen protests across the world against the economic woes,” said the Home Ministry official, adding, “Agencies under the Home Ministry will look to maintain law and order. Since the problem is multifaceted, our efforts alone may not be adequate.” In Sri Lanka, the once powerful ruling Rajapaksha family was removed from power from street protests last year after an economic crisis engulfed the South Asian Island country. Nepal’s economy is also performing badly as both consumer and business demand have dwindled sharply over the past year. As a result, the government’s revenue collection has dropped dramatically, which is being called the lowest in over 50 years, in the current fiscal year and the government is struggling even to manage the budget for recurrent expenditure. “So, it is necessary to address not only the issue of the law and order but also the economic problems plaguing the country,” the Home Ministry official said.