Kathmandu, July 15: The Supreme Court (SC) has ruled that banks and financial institutions (BFIs) are essential services, declaring that organising borrowers to stage strikes, intimidate banks, or disrupt their operations is unlawful.
A joint bench of Justices Kumar Regmi and Bal Krishna Dhakal made the ruling while dismissing a habeas corpus petition filed by Devi Prasad Sangroula, central coordinator of the Loan Association under Durga Prasai’s campaign. The full text of the May 14 verdict was released recently.
The court said banks operate in a highly sensitive sector and warned that unlawful activities targeting them could jeopardise public deposits, erode confidence in financial institutions, and ultimately threaten the country’s entire financial system.
“Undesirable activities against banks and financial institutions put public deposits at risk, damage their credibility, and endanger the interconnected financial system,” the verdict states.
The court also said protecting banks from external interference is the state’s responsibility, adding that authorities must respond proactively, not merely after offences occur.
Sangroula was arrested in Rupandehi on April 28 while collecting records of borrowers and expanding his organisation among people who had taken loans from banks and microfinance institutions. Police accused him of delivering speeches that incited the public, disturbing public order, and encouraging crowds to confront banks, financial institutions, cooperatives, and microfinance offices. He also allegedly shared videos of such activities on social media.
The Supreme Court found no dispute over these facts and upheld the legality of his arrest.
The verdict emphasised that Nepal Rastra Bank already regulates and supervises licensed financial institutions under existing laws, while banking offences are governed by the Banking Offences and Punishment Act. Since legal mechanisms exist to address misconduct by banks, the court said there is no justification for any individual or group to mobilise borrowers against them.
It further noted that banking services are classified as essential services under the Essential Services Operation Act, meaning their uninterrupted operation is protected by law.
Citing an earlier precedent issued in December 2025, the court said the state must prevent threats, intimidation of bank employees, obstruction of willing borrowers from repaying loans, attacks on bank offices, resistance to collateral recovery, and campaigns falsely promising loan waivers.
The bench concluded that people who voluntarily obtain loans through legal procedures remain obligated to repay them, and no individual has the authority to organise campaigns urging borrowers to default or obstruct banking operations. The court also reaffirmed that habeas corpus applies only in cases of unlawful detention, not when arrests and investigations follow due legal process.
People’s News Monitoring Service
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