The Great Contradiction in Nepal’s Fintech Future

Last week, Nepal Rastra Bank came up with a shocking directive as it ordered Laxmi Sunrise Bank to shut down its fully digital banking platform ‘OrangeNXT’. This was Nepal’s only digital-only banking service operated for the past one and a half years in collaboration with F1Soft. The “digital-only bank” is a kind of bank that operates entirely online without any physical branches. The central bank suspended the platform citing the absence of regulatory provisions for digital-only banks and even went as far as to say the service was running without a proper legal framework. To me, this decision is nothing short of regressive. At a time when Nepal’s smartphone and internet penetration is at its peak, the central bank should be promoting innovation and paving the way for neo-banking, not pulling the plug on a forward-looking initiative.