Kathmandu – For banks and financial institutions to excel, skilled employees are essential. Employees play a critical role in strengthening the financial performance of these institutions. Just as employees are important to these organizations, it is equally necessary for them to be capable and efficient. Bank employees must possess the skills to understand various situations and conduct transactions accordingly, making capacity-building investments essential.

There are several reasons for investing in employee capacity building. When employees’ skills improve, institutions can achieve better results. Enhanced capacity-building also increases employees’ skills, knowledge, and efficiency, helping them perform their roles more effectively. Consequently, skilled employees increase productivity and service quality, highlighting the need for investment in their capacity development.

As the banking and financial sector is sensitive and constantly adopting new technologies, capacity building is crucial to equip employees to work with these innovations. Training enables employees to adapt to technological advancements, ensuring that they remain efficient and aligned with modern requirements.

Experts believe that by investing in employee capacity development, institutions can fully utilize their workforce’s potential. This investment is seen as essential for providing quality service, enabling employees to better understand and meet customers’ needs, which leads to greater customer satisfaction, increased trust, and enhanced brand value for banks.

In recent years, as banks continue to adopt digital platforms, mobile banking, and artificial intelligence, investing in employee capacity has become increasingly necessary. With proper training, employees can operate efficiently on digital platforms, delivering services effectively.

The Nepal Rastra Bank has implemented a policy requiring banks to allocate 1% of Corporate Social Responsibility (CSR) funds for employee capacity development. Former Governor Chiranjibi Nepal introduced this policy, emphasizing that 1% of CSR funds should be used for employee training. Additionally, he established a 3% provision for capacity development to standardize employee skill levels during bank mergers.

The central bank continues to enforce this policy. Former Governor Nepal remarked that the financial sector is highly impacted by rapid technological changes, stressing that training is vital in such an environment. Experts agree that investing in capacity development benefits banks and increases profitability.

Executive Director of the Nepal Bankers’ Association, Anil Sharma, affirmed that banks operate within central bank policies. “Under the directives of Nepal Rastra Bank, 3% of CSR funds must be allocated for capacity building. Skilled employees perform better, leading to positive outcomes for both banks and customers,” he noted.