5th October 2025, Kathmandu
The Nepal Rastra Bank (NRB), the nation’s central bank, has taken a proactive and significant step to ensure the stability and continuity of the country’s financial market by declaring the operational continuity of the Real-Time Gross Settlement (RTGS) system during the recently announced, unscheduled public holidays.
NRB Extends RTGS Service
The Nepal Rastra Bank (NRB), the nation’s central bank, has taken a proactive and significant step to ensure the stability and continuity of the country’s financial market by declaring the operational continuity of the Real-Time Gross Settlement (RTGS) system during the recently announced, unscheduled public holidays. This decision, conveyed through a notice from the NRB’s Payment Systems Department, is a critical move to mitigate the potential economic paralysis that could result from a complete cessation of high-value fund transfers during an unexpected extended break.
The government’s rationale for declaring the public holidays on Ashoj 19 and 20 (which corresponds to October 5 and 6 in the Gregorian calendar for 2025) was primarily driven by exigent circumstances: the continuous, heavy rainfall that has caused widespread and severe disruption to the national transportation network and general public movement. While this weather-induced holiday is a necessary public safety measure, it posed a severe threat to the smooth functioning of the financial system, which is dependent on timely payment and settlement.
Extended RTGS Operational Window
Crucially, the central bank has extended the operation of the RTGS system specifically for these two additional days. Initially, the system was only guaranteed to remain functional until the commencement of the major Dashain holidays. The extension ensures that the financial sector remains active even as the rest of the nation observes the emergency holiday.
The RTGS service will be operational on both designated days, October 5 (Ashoj 19) and October 6 (Ashoj 20), following a specific schedule:
Operating Hours: 10:00 a.m. to 4:00 p.m.
This six-hour window provides a structured opportunity for banks and financial institutions (BFIs) to execute their most critical and high-value transactions. As the RTGS system is the backbone for large-value payments in the country, maintaining its functionality is paramount for day-to-day liquidity management and the settlement of large commercial deals.
The Rationale for Financial Continuity
The decision to keep the RTGS system running, despite the public holidays, is deeply rooted in the need to uphold financial stability and maintain a robust payment infrastructure. The RTGS system processes transactions individually and provides immediate, final, and irrevocable settlement in central bank money. By ensuring its continued operation, the NRB achieves several vital goals:
Preventing Disruptions in High-Value Fund Transfers: High-value corporate transactions, government payments, and interbank transfers, which are often time-critical, can proceed without being suspended for two days. This prevents significant delays in commerce and official business.
Maintaining Interbank Liquidity: Commercial banks rely on the RTGS system to manage their short-term liquidity positions with the central bank and with each other. A two-day shutdown could severely constrain interbank lending and the overall management of liquidity in the financial market, potentially leading to increased systemic risk.
Facilitating Payment System Settlement: The RTGS system is also used to settle the net positions of other payment systems, such as the Automated Clearing House (ACH) for retail and bulk payments. Keeping RTGS active ensures that the finality of settlement for these other systems is not unduly delayed, reinforcing trust in the entire payment ecosystem.
Supporting Emergency Economic Activities: Given the cause of the holiday, heavy rain and disruption, certain sectors, such as disaster response, emergency procurement, or crucial public infrastructure maintenance, may require immediate, large-scale funding transfers. An operational RTGS system facilitates these emergency economic activities quickly and securely.
Implications for the Financial Sector and Public
The central bank’s move signals a commitment to operational resilience, especially during unforeseen events. For banks and financial institutions, this means key personnel must remain on standby to utilize the extended RTGS window. This requirement ensures that any payment backlogs that could have accumulated due to the existing holiday schedule or the Dashain period are kept to a minimum.
For the public and businesses, this serves as an assurance that while physical movement may be restricted by the severe weather and public holiday, the ability to conduct major financial transactions remains intact. High-value transactions, typically defined as those exceeding a specified limit (which is mandatory for RTGS), will benefit from the immediate settlement certainty.
In essence, the NRB’s decision on the RTGS service minimizes the economic fallout from the meteorological disaster by ring-fencing the critical high-value payment infrastructure, thereby facilitating smooth financial transactions and preventing an avoidable gridlock in the country’s payment and settlement systems during this unusual, extended public holiday period. This measure strengthens the financial system’s ability to absorb external shocks, whether they be systemic or weather-related.
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