Nepal Rastra Bank’s Trade Unions Dominate Workforce, Membership Exceeds Total Staff

August 11, Kathmandu – Despite the government’s ongoing efforts to dissolve trade unions among government employees and teachers, labor organizations remain influential within Nepal Rastra Bank, the country’s financial regulator.

According to sources at the national bank, out of a total staff of 1,166, over 800 employees are affiliated with one or more trade unions. This indicates that approximately 70% of the employees are union members, according to employee organizations.

Only up to the rank of Third Class Officer, equivalent to Assistant Director, is authorized to join the trade unions at Rastra Bank. Around 300 employees hold senior positions, whereas over 866 employees belong to Third Class Officer ranks or lower, with the majority affiliated with unions, union leaders said.

A senior official stated that with two-thirds of the bank’s workforce unionized, the bank struggles to operate effectively when it cannot satisfy their interests.

“Interference by employee organizations in every administrative activity is not new. It is a common practice for employee unions to control the central bank’s operations,” the official explained.

The government led by Prime Minister Balendra (Balen) Shah has amended various laws via ordinance to dissolve trade unions of civil servants. This has reduced the activity of employee organizations in government entities, but unions at Rastra Bank remain active.

Three unions operate within Nepal Rastra Bank: Nepal Rastra Bank Employee Union, Nepal Financial Institution Employees Union, and Nepal National Employee Organization Nepal Rastra Bank. These organizations are supported by political parties.

The bank’s employee union is affiliated with the Communist Party of Nepal (Unified Marxist–Leninist, UML), the financial institution union supports the Nepali Congress, and the national employee organization backs the Nepal Communist Party, employees report.

“These organizations lobby during the appointment of the bank’s governor and typically support their respective parties,” said employees.

Over 1,200 Members Across Three Unions Despite Fewer Employees

Although Rastra Bank’s total staff is 1,166, membership across the three trade unions exceeds 1,200. Ramhari Ghimire, president of the UML-backed Nepal Rastra Bank Employee Union, said his union has 550 members.

A senior official from the Nepali Congress-supported Nepal Financial Institution Employees Union cited 561 members, while the Communist Party-supported Nepal National Employee Organization has over 100 active members.

Combined, this totals around 1,210 members. Union leaders suggest this may be due to some retired employees retaining membership and some individuals holding dual membership.

Three Central Committees and 29 Branches

The three trade unions’ central committees collectively include 324 employees—approximately 27.78% of total staff. According to the Nepal Rastra Bank Employee Service Regulation 2011, only third class employees are eligible for union membership. However, some second class employees have reportedly joined the financial institution union.

Each union has one central committee and three branches within the Kathmandu Valley, with Human Resources branches in Baluwatar, Thapathali, and Taksar.

Among the bank’s eight regional offices, each hosts branches of the UML and Nepali Congress supporter unions, while the Communist Party-supported organization operates seven branches. In total, 32 committee branches exist within Rastra Bank, although no officially recognized trade union is formally registered.

Union Influence Over Transfers and Promotions

Bank officials confirm that unions actively intervene in decisions on employee transfers, promotions, and foreign travel.

A senior official admitted that the Human Resources department struggles to make effective transfer decisions without the consent of union committee members.

Although the government abolished trade unions among civil servants, no such decisive action has succeeded at Nepal Rastra Bank. In addition to union membership, employee organizations are granted other benefits, such as office space and annual budgets.

Each branch receives office space and an annual budget. However, Rastra Bank awaits a labor office decision on whether to renew the registration certificates of these unions.

Employee benefits granted by unions are not mentioned in employee regulations. Yet unionized employees enjoy special privileges such as non-transferability and leave without pay (called “binābhattā kaj”).

Employees can receive such leave with union recommendation without salary deductions.

“Unions dedicate full-time to their activities, often neglecting the bank’s work,” said the official. “There are instances when union work is not conducted properly.”

Depending on the situation, leadership usually comes from unions affiliated with the ruling party, which then influence promotions and transfers.

“Human Resources cannot transfer the Executive Director without union consent,” the official noted. “For Deputy Executive Director positions, unions provide recommendations, though not all are implemented fully.”

However, union leaders argue that their organizations represent collective bargaining, essential due to the lack of other forums for employee grievances. “Employees have no place to raise complaints other than the union. Management holds more power, so collective bargaining is crucial,” one leader explained.

He asked rhetorically, “Where will employees turn when pressured by management or when supervisors create difficulties?”

He also emphasized, “Collective bargaining is necessary. While government salaries rise uniformly, this does not occur in the private sector, so improvements and proper reforms are required without dissolving unions.”

Unions have created an environment conducive to work by facilitating dialogue with management. When individual dissatisfaction arises, an understanding between management and union leadership usually resolves issues.

Rastra Bank Provides Offices and Budgets to Unions

Nepal Rastra Bank provides not only office space but also an annual budget of five hundred thousand rupees to these employee organizations.

Currently, unions have not requested funds, but the bank expects to continue the budget until union deregistration occurs. The labor office has renewed registration certificates accordingly.

One bank official confirmed that organizations registered with the labor office will continue to receive operational expenses until formally dissolved.

Although the unions have submitted written budget requests for the current fiscal year, the bank has yet to finalize a decision.

Available Employee Benefits

Employees can obtain additional leave beyond regular vacation through union recommendations. A unique facility, called “binābhattā kaj,” allows leave without salary deductions.

Each union can recommend up to 500 days of such leave annually, and collectively, the three unions grant up to 1,500 days per year.

Various offices have union branches with allocated office spaces. In total, 11 offices including regional branches have union representation. However, only the Communist Party-affiliated union operates branches in seven offices.

Union Leadership: Exercising Collective Bargaining Rights Under the Law

Ramhari Ghimire, chairman of the Nepal Rastra Bank Employee Union, stated, “We exercise our rights as per the law. Our activities have not harmed the bank. Organizational work is conducted outside office hours.”

He acknowledged reduced union activism and participation after the government dissolved union rights for civil servants. Union officials from all three organizations said they have been excluded from management discussions.

The government’s ordinance effectively abolished the definition and provisions related to trade unions under the Civil Service Act 1992. This ordinance was published in the Nepal Gazette on April 3, 2025, and came into effect immediately.

This move is akin to dissolving civil service organizations, but it has had limited effect at Nepal Rastra Bank.

These employee unions, which influence routine operations, remain uncertain about their future due to recent government decisions. They argue their organizations operate under labor laws and bank regulations.

Bank officials say the trade union framework was removed from the bank’s service regulations, but the unions continue to exist. However, union participation in management committee meetings has ceased, and the current fiscal budget is uncertain.

“Previously, all three employee organizations had representation in management meetings. This time, the governor was not allowed to include union representatives due to government pressure,” said an official.