Kathmandu: A surge of customers has hit banks across Nepal after the government announced plans to transfer funds from bank accounts that have remained inactive for 10 years or more into the state treasury. Many people, who had left their accounts untouched for years, are now rushing to reactivate them to avoid losing their deposits.
Bank staff say the response has been immediate and overwhelming. At one commercial bank branch in Kathmandu, as many as 50 customers showed up in a single day to revive dormant accounts. Officials note that ever since the announcement, queues have become a daily occurrence, with dozens of account holders visiting branches to restore access to their funds.
The move follows the government’s 100-day governance reform agenda unveiled on the same day Prime Minister Balendra Shah took office on March 13. Among the measures is a decision to bring into the պետական treasury funds lying idle in bank accounts for over a decade.
Bankers say the policy has triggered widespread action not only within Nepal but also among Nepalis living abroad. While residents are visiting branches in person, those overseas are making inquiries through digital and other channels, seeking information on how long their accounts have been inactive and what steps are required to reactivate them.
Under current regulations issued by Nepal Rastra Bank, a savings account is classified as dormant if no transactions occur for three consecutive years. For current and call accounts, the threshold is one year without activity.
According to the central bank, dormant accounts collectively hold around Rs 188 billion. Authorities are still determining how much of that total has remained inactive for more than 10 years, though estimates suggest it could be around Rs 20 billion.
The government’s plan specifically targets accounts with no transactions for a decade, aiming to mobilize such idle resources for public use. As part of its reform agenda, it has pledged to identify and manage these and other inactive assets within 90 days, transferring unclaimed funds to the state treasury after completing legal procedures.
Banks report a sharp rise in requests to reactivate accounts since the announcement. At NMB Bank, for instance, daily applications to revive dormant accounts have jumped from around 70–80 to as many as 120–130, according to senior deputy CEO Sudesh Upadhyay. Similar trends are being observed across the banking sector.
Santosh Koirala, CEO of Machhapuchchhre Bank and president of the Nepal Bankers’ Association, says interest has increased across the board. Not only are more customers reactivating accounts, but many—especially those abroad—are also reaching out to check balances, accrued interest, and account status after years of inactivity.
Legally, the management of dormant account funds is governed by the Bank and Financial Institutions Act (BAFIA). Banks are required to report details of accounts that have remained inactive for 10 years or more to Nepal Rastra Bank within the first month of each fiscal year. They must also publish public notices every five years in national newspapers and maintain updated information on their websites.
If depositors fail to claim their funds even after 20 years, the money is transferred to the central bank’s Banking Development Fund, where it is used to support financial sector development. However, even after transfer, depositors can reclaim their money with proper documentation and a recommendation from the concerned bank. Currently, around Rs 1.67 billion from unclaimed deposits has accumulated in this fund.
Reactivating a dormant account is relatively straightforward. Account holders need to visit their bank and submit a written request. If their Know Your Customer (KYC) details are already up to date, no additional documentation is required. Banks may also allow KYC updates and account reactivation through online or electronic channels.
Accounts that have remained inactive for 10 years and have zero balance may be permanently closed by banks after issuing public notices. Regardless, funds in bank accounts remain the property of the account holder. In the event of the depositor’s death, the balance is paid out according to the nominee designated at the time of account opening or, failing that, to legal heirs as per prevailing laws.
If no claimant is found, the funds are ultimately transferred to the Banking Development Fund. However, despite the government’s decision to move such money into the state treasury, existing legal provisions under BAFIA do not currently allow for immediate transfer. Amending the law would be necessary to implement the plan.
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