Banks Scrapping Insurance Benefits to Cut Operating Expenses and Account Costs

Kathmandu. In recent times, banks have been under pressure due to sluggish credit flow and piled-up deposits. As a result, banks have reached a situation where they cannot cover operating expenses.

For this reason, commercial banks have started cutting benefits they have been providing to customers. They have begun announcing the cancellation of insurance benefits to reduce operating expenses and account costs.

The latest example is Sanima Bank. This bank has removed the insurance benefit it has been providing on various savings accounts (Sunulo Savings Account, Sanima Super Saving, Sanima Family Super Saving, and Sanima Dirghayu Salary Account) effective from Ashwin 14.

Not only Sanima Bank, but other banks are also cutting such benefits. Banks had been providing accident insurance, health treatment insurance, and life insurance benefits ranging from 1 lakh to 10 lakh rupees to savings and fixed deposit account holders with fixed deposits and minimum cash deposits of 10 thousand or more.

Nepal Rastra Bank spokesperson Guru Prasad Poudel said that banks may have cut the insurance benefit provided on savings accounts due to increased operating expenses. "Now, customers may be indifferent about the duration of the insurance benefit when opening an account, or they may have a negative view when this benefit is suddenly withdrawn," he said. "We will talk to banks and financial institutions on this matter and try to resolve the problem by identifying the reality."

However, spokesperson Poudel said that the provision of providing insurance benefits from banks had already been removed earlier. "If some banks had provided insurance benefits before Nepal Rastra Bank removed this provision, we will discuss that matter," he said.