{"id":2008,"date":"2026-05-24T02:44:34","date_gmt":"2026-05-24T02:44:34","guid":{"rendered":"https:\/\/english.bankingkhabar.com\/?p=2008"},"modified":"2026-05-24T02:44:34","modified_gmt":"2026-05-24T02:44:34","slug":"after-ministry-directive-nepal-rastra-bank-takes-action-end-to-overtime-overpay","status":"publish","type":"post","link":"https:\/\/english.bankingkhabar.com\/?p=2008","title":{"rendered":"After Ministry Directive, Nepal Rastra Bank Takes Action: End to \u2018Overtime Overpay\u2019"},"content":{"rendered":"

\"\"<\/a>Banking Khabar \/<\/strong> Only after receiving a directive from the ministry did Nepal Rastra Bank finally issue a circular stating that employees working in banks and financial institutions must be provided overtime benefits in accordance with the law when made to work extra hours. The fact that the ministry had to intervene in a responsibility that should have been handled by the regulator itself has once again raised questions over the central bank\u2019s regulatory effectiveness.<\/p>\n

Several complaints regarding the issue had previously been submitted to the central bank, but it had largely remained silent in support of bank employees. The Ministry of Labour had formally written to the regulatory body, Nepal Rastra Bank, regarding the practice of making employees work overtime without providing overtime pay. Despite such activities taking place in the banking and financial sector, the central bank had continued to remain a silent spectator.<\/p>\n

\u00a0Labor Act and Policy<\/span><\/strong><\/p>\n

According to the Labor Act, 2017 enforced under Nepal\u2019s Ministry of Labour, Employment and Social Security, any institution that requires employees to work beyond the prescribed working hours is legally obligated to provide additional compensation. Banks and financial institutions also fall under the jurisdiction of this law.In the banking sector, work exceeding 8 hours a day or 48 hours a week is generally considered overtime. In such cases, there is a legal provision requiring employees to be paid up to one-and-a-half times their basic salary as overtime compensation.<\/p>\n

In recent years, increasing workload, pressure to meet targets, and the growing practice of making employees work late into the night in the banking sector have prompted Nepal Rastra Bank to become more sensitive toward employee welfare and human resource management. During bank inspections, the central bank has also been evaluating labor practices, employee management, and institutional governance.Employee unions have particularly been raising concerns over the growing trend of making staff work beyond regular hours due to the expansion of digital banking, branch expansion, loan recovery efforts, audits, and the preparation of financial statements. In such circumstances, concerned authorities have also warned that banks failing to comply with labor laws could face legal action.<\/p>\n

According to analysts, banks are now being compelled to change the old practice of making employees work extra hours without compensation under the pretext of \u201cmeeting targets\u201d or \u201cmanagement pressure.\u201d Banks that fail to respect employees\u2019 labor rights, mental health, and work-life balance could face legal disputes and reputational risks in the future.As a result, a clear message has now emerged in the banking sector: if employees are required to work overtime, they must also be provided with proper overtime compensation. Otherwise, banks could face allegations of violating labor laws and increased scrutiny from regulatory authorities.<\/p>\n

\u201cSilence Despite the Central Bank Seeing It\u201d<\/span><\/strong><\/p>\n

As complaints continue to rise in Nepal over banks and financial institutions making employees work extra hours without providing proper overtime benefits, pressure for action against such practices has now begun to intensify. According to the Labor Act, 2017, any institution that requires employees to work beyond the prescribed working hours is legally obligated to provide additional compensation. However, in the banking sector, many employees have long complained that despite regularly working overtime, they are not receiving the corresponding payment.<\/p>\n

Nepal\u2019s banking sector has become increasingly technology-driven and competitive. Due to branch expansion, digital banking, target-based work systems, and growing customer pressure, the workload on employees has significantly increased. In many banks, working from morning until late evening has almost become a workplace culture. Particularly during month-end closing periods, financial statement preparation, loan recovery operations, and audits, employees are often forced to remain in the office until late at night. Despite this, many do not receive the overtime benefits guaranteed by law.<\/p>\n

The Labor Act clearly states that employees working more than 48 hours a week must be provided additional compensation. Under the law, overtime work requires payment of up to one-and-a-half times the employee\u2019s basic salary. The law also prohibits employers from forcing employees to work extended hours continuously without their consent. However, in practice, many banks have been accused of making employees work overtime under the pretext of \u201cperformance,\u201d \u201ctargets,\u201d or \u201cprofessional responsibility.\u201d<\/p>\n

According to employee unions in the banking sector, staff in some banks are required to work as long as 10 to 12 hours a day. Even after branch operations officially close, employees are often compelled to stay late at the office for reporting, system updates, loan file processing, customer documentation, and reconciliation of digital transactions. In most cases, however, overtime pay is not provided, leave management remains weak, and mental stress continues to increase.<\/p>\n

In this situation, labor and employment offices along with regulatory authorities have indicated that they will now increase monitoring of labor practices within banks. If violations of the Labor Act are proven, banks and financial institutions could face fines, compensation claims, and legal action. According to labor experts, although banks are financial institutions, they are not above labor laws. Providing employees with timely salaries, leave benefits, social security, and overtime compensation is a mandatory responsibility.<\/p>\n

Nepal Rastra Bank has also recently started placing greater emphasis on \u201chuman resource management\u201d within the banking sector. There is a growing view that improving the work environment is essential to maintaining high employee morale and ensuring a healthy and sustainable banking system. Analysts argue that if employees are continuously subjected to stress, excessive workloads, and dissatisfaction, the quality of banking services itself could be affected.Experts say that the increasing focus on profit-driven operations in the banking sector has intensified pressure on employees. While many banks are aggressively expanding branches and growing their business, they have not paid adequate attention to employees\u2019 work-life balance. As a result, risks such as mental stress, declining productivity, employee turnover, and service-related errors are beginning to rise.<\/p>\n

On the other hand, employees themselves also need to become more aware of their rights. Many employees continue to work extra hours out of fear of losing their jobs and are unable to raise their voices. However, labor laws clearly provide employees with the right to demand protection of their labor rights.Banks are now facing increasing pressure to adopt modern human resource policies, including transparent working hours, proper overtime benefits, and employee-friendly work environments. Otherwise, violations of labor laws could expose banks to legal disputes, reputational damage, and growing employee dissatisfaction.<\/p>\n

Nepal\u2019s banking sector is considered a vital pillar of the country\u2019s economy. Experts believe that only by respecting the labor, time, and rights of employees working in this sector can the banking system become more reliable, efficient, and sustainable.<\/p>\n","protected":false},"excerpt":{"rendered":"

Banking Khabar \/ Only after receiving a directive from the ministry did Nepal Rastra Bank finally issue a circular stating that employees working in banks and financial institutions must be provided overtime benefits in accordance with the law when made to work extra hours. 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