The government has appointed Pitambar Bhandari, a former executive director of Nepal Rastra Bank (NRB), as chief executive officer of the Deposit and Credit Guarantee Fund (DCGF).
The Cabinet decided on the appointment on Tuesday, November 3, on the recommendation of the Ministry of Finance. Finance Minister Dr Swarnim Wagle handed Bhandari his appointment letter at a ministry programme on Wednesday, November 4.
Who is Bhandari
Bhandari is originally from Dhurkot, Gulmi. He holds a master’s degree in economics from Tribhuvan University and an MSc in international economics from the University of Bradford in the United Kingdom. He joined NRB in 2000 as an assistant director in its Economic Research Department and became an executive director in 2018. Until 2025 he held senior responsibilities in monetary management, supervision of financial and non-bank financial institutions, human resources, institutional planning and risk management.
He served on the DCGF board from July 2019 to August 2020 and on the board of the Securities Board of Nepal from December 2025 to May 2026. On September 4, the Finance Ministry had published a shortlist of six candidates that included him, with business-plan presentations and interviews scheduled for September 17 and 18.
What the Fund does
The DCGF protects eligible depositors if a member bank or financial institution is liquidated, and guarantees part of the losses on eligible loans to encourage lending to sectors that struggle to obtain finance. It began on September 20, 1974, as the Credit Guarantee Corporation. Under the Deposit and Credit Guarantee Fund Act, 2073, it took on both deposit and credit guarantees. Nepal’s deposit guarantee scheme began operating in 2010.
It guarantees deposits of individuals up to Rs 500,000 per person per member institution, covering savings and fixed deposits together. The limit applies to each institution, not each account, so several accounts at one bank do not multiply the cover. Deposits held by specified insiders, promoters and shareholders with at least 5 percent, their specified relatives, and deposits derived from crime are excluded. Its website lists 20 commercial banks, 17 development banks, 17 finance companies and two microfinance institutions as members.
When an institution is liquidated, the liquidator gives the Fund depositor details within 10 days, the Fund verifies them and selects a paying agent within 30 days, and payment is generally to be completed within three months, with extensions possible.
Credit guarantees
A credit guarantee protects the lender, not the borrower, who must still repay. Schemes cover agriculture, small and medium enterprises, microfinance and deprived sectors, education, livestock and export credit. Under the agricultural scheme, loans up to Rs 10 million are eligible, and those up to Rs 30 million need prior approval. The annual premium is 0.6 percent, half subsidised by the government, and compensation is 80 percent of the outstanding balance for loans up to Rs 5 million and 70 percent above that. The microfinance and deprived-sector scheme covers loans up to Rs 1 million, or Rs 2 million with collateral, at a premium of 0.8 percent with 75 percent compensation.
Scale
NRB data as of mid-July 2025 show Rs 1.579 trillion in guaranteed deposits, up 10.4 percent in a year, and Rs 327.42 billion in guaranteed credit, also up 10.4 percent. Deposit accounts covered rose to 57.14 million from 45.80 million, counting accounts rather than people. Guaranteed deposits are not the Fund’s cash reserves, and guaranteed loans are not money the Fund has lent. The Fund keeps separate deposit-guarantee, credit-guarantee and deposit-guarantee-risk funds.
The CEO’s role
The CEO carries out board decisions, prepares strategic plans and financial statements, and manages daily operations. The Act provides a four-year term, and removal requires an inquiry and an opportunity to defend.
Challenges ahead
The IMF’s 2026 report on Nepal says reforms to the DCGF have begun to improve risk sharing and limit contingent liabilities, and recommends phasing out directed lending and widening credit guarantees to more priority sectors. Priorities for the new chief include accurate depositor records and quick claim payments, coordination with NRB on distressed institutions, controlling guarantee exposure so banks keep assessing borrowers carefully, and regular public reporting of fund balances, claims and recoveries.
