Nepal Rastra Bank orders shutdown of OrangeNXT, citing lack of legal framework for new technology
भदौ ९, २०८२ ११:१७
Kathmandu: Nepal Rastra Bank has directed Laxmi Sunrise Bank to shut down the OrangeNXT service, developed by F1Soft with a new digital banking concept. The central bank issued the directive a week after Laxmi Sunrise Bank launched the service, aimed at simplifying traditional banking practices through technology.
According to Laxmi Sunrise Bank, OrangeNXT allowed customers to access services via mobile phones, including opening an account without visiting a branch. This model, known as neo-banking, offers fully digital and mobile-based banking facilities. OrangeNXT was presented as a new solution for digital banking, designed to make services more accessible through a mobile app.
Developed by F1Soft Group over three years, OrangeNXT had been operating through Laxmi Sunrise Bank since January 2024. It was designed to enable all banking processes, from opening an account and filling out KYC to starting mobile banking, without visiting a branch.
Since the existing banking system could not accommodate this model, Laxmi Sunrise Bank asked F1Soft Group to create a separate setup. Accordingly, a different system was designed for the bank. However, Nepal Rastra Bank has instructed the suspension of OrangeNXT, giving two months to migrate customers to the bank’s existing system, citing the absence of a regulatory framework for such platforms.
Subash Sharma, Director of F1Soft Group, criticized the decision, arguing that technology should not be restricted due to regulatory gaps. “We spent three years developing this product to attract the new generation to banking through technology. We informed the central bank before launching it through Laxmi Bank a year and a half ago. Still, the National Bank has now directed us to suspend OrangeNXT as of August 29 and migrate users within two months,” Sharma said.
He further argued that the traditional banking system does not suit the needs of younger customers. “Does the new generation enjoy traditional banking? To open an account, they still have to visit a branch and fill out forms. That’s why OrangeNXT included features like bill-splitting, savings goals, and expense tracking. Mobile banking should mean more than just an app,” he added.
Laxmi Bank had launched OrangeNXT on a small scale, avoiding major investment due to the lack of regulatory clarity. Currently, 30,000–35,000 customers with updated KYC are active users, while over 60,000 people have downloaded and used the app in some form. Accounts under Orange Next reportedly hold more than Rs 150 million.
The platform featured seven key tools: Goal-Based Deposit, Save as You Pay, Expense Tracker, Fixed Deposit, Chatbot Support, Personalized Notifications, and Smart Budget. These tools were designed to help users manage savings effectively.
One customer, Sagar Koirala, shared his experience: “I always bought second-hand phones, but they quickly had problems. Nine months ago, I started using Goal-Based Deposit. By saving Rs 10,000 each month, I was able to buy a new phone from my own earnings. But now, features like this will no longer be available.”
As the service falls outside current regulation, Nepal Rastra Bank has ordered customers to be shifted to Laxmi Sunrise Bank’s full-time services. “We have instructed the bank to migrate OrangeNXT users to the existing system. Since there is no legal framework, such services cannot be provided at present,” said an official from the central bank.
Meanwhile, Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel had announced an ambitious plan in the current fiscal year’s budget (2082/83) to establish a licensed Neo Bank. Unlike traditional banks that expand through branches, a Neo Bank operates entirely on a digital platform, offering account opening, fund transfers, loans, and other investment options via an app or website, without requiring a physical visit to a branch.
पछिल्लो अध्यावधिक: भदौ ९, २०८२ ११:१७
