Kathmandu, Aug. 24 -- Nepal's annual budget has promised the launch of fully digital financial institutions-neo-banks-within the current fiscal year 2025-26. The Nepal Rastra Bank's monetary policy, announced in July, also supports this pledge.

But in a move that has left thousands of customers and fintech entrepreneurs dismayed, the central bank has ordered Laxmi Sunrise Bank to shut down its digital-only banking service named OrangeNXT, which it had been running for the past year and a half in partnership with fintech company FoneNXT.

The service was designed for a generation of customers who dislike long queues and paperwork, especially Gen-Z, migrant workers abroad, and those in remote areas of the country with limited access to ban...