𝐂𝐥𝐨𝐬𝐮𝐫𝐞 𝐎𝐟 𝐆𝐞𝐰𝐨𝐠 𝐎𝐟𝐟𝐢𝐜𝐞𝐬 𝐑𝐚𝐢𝐬𝐞𝐬 𝐂𝐨𝐧𝐜𝐞𝐫𝐧𝐬 𝐎𝐯𝐞𝐫 𝐑𝐮𝐫𝐚𝐥 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐀𝐜𝐜𝐞𝐬𝐬

…𝒕𝒉𝒆 𝑴𝒊𝒏𝒊𝒔𝒕𝒓𝒚 𝒐𝒇 𝑭𝒊𝒏𝒂𝒏𝒄𝒆 𝒎𝒂𝒊𝒏𝒕𝒂𝒊𝒏𝒔 𝒕𝒉𝒂𝒕 𝒕𝒉𝒆 𝒔𝒉𝒊𝒇𝒕 𝒕𝒐 𝒂𝒈𝒆𝒏𝒄𝒚 𝒃𝒂𝒏𝒌𝒊𝒏𝒈 𝒘𝒊𝒍𝒍 𝒑𝒓𝒆𝒔𝒆𝒓𝒗𝒆 𝒊𝒏𝒄𝒍𝒖𝒔𝒊𝒐𝒏 𝒂𝒏𝒅 𝒆𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒄𝒚, 𝒂𝒎𝒊𝒅 𝒂𝒑𝒑𝒆𝒂𝒍𝒔 𝒇𝒐𝒓 𝒔𝒕𝒓𝒐𝒏𝒈𝒆𝒓 𝒄𝒐𝒎𝒎𝒖𝒏𝒊𝒕𝒚 𝒄𝒐𝒏𝒔𝒖𝒍𝒕𝒂𝒕𝒊𝒐𝒏.

By Sonam Choden

The closure of Bhutan Development Bank Limited’s gewog offices has raised significant concern among rural communities that rely on the bank for essential financial services. The issue was brought to the floor of the Fourth Parliament by Tshering Penjor, Member of Parliament from Dewathang Gomdar constituency, who questioned the reasoning behind shutting down offices that have long supported local development, agriculture, and rural livelihoods. The discussion has drawn attention to the growing tension between the government’s focus on institutional efficiency and the need to maintain financial inclusion across remote regions.

BDBL was established to provide easy access to credit, savings, and financial services to rural populations, especially farmers, youth, and small-scale entrepreneurs. Its gewog offices played an important role in improving rural financial access by offering loan disbursement, repayment services, and savings facilities closer to communities. Over the years, these offices contributed to strengthening rural livelihoods and encouraging grassroots entrepreneurship.

However, the recent closure of several gewog service centres has drawn criticism. The MP pointed out that the gewog offices were opened after extensive consultations, yet the decision to close them seemed to have been made from the centre without proper communication with local leaders. He highlighted that even Dzongdags and Gups were unaware of the decision. The issue has been discussed across several Dzongkhag Tshogdues, with repeated appeals for the government to reconsider the closure in order to safeguard rural access to financial services.

Responding to the concerns, Lekey Dorji, Minister of Finance, explained that BDBL had undergone an institutional transformation in 2022 and 2023 aimed at supporting long term financial sustainability and enabling more affordable lending rates for borrowers. The Minister said the reform process involved a thorough review of all BDBL services and operational models, including the performance of gewog field offices.

He stated, “While Gewog offices have historically supported rural livelihoods, operating offices with very low transaction volumes, often fewer than ten per day, imposes significant costs around Nu. 2.2 million per office per year that ultimately affect the Bank’s ability to serve communities efficiently.”

The Minister added that maintaining offices with such low activity was no longer viable for a financial institution working to reduce lending costs and improve long term efficiency. He further said, “The Ministry of Finance fully supports Bhutan Development Bank Limited’s decision to review and transform its Gewog Field Office operations as part of a strategic institutional reform. This is aimed at ensuring long-term financial sustainability and maintaining affordable lending rates for rural borrowers.”

To prevent disruptions to rural services, BDBL is introducing an Agency Banking model, supported by Farmers Outreach services and on-call visits coordinated with gewog administrations. According to the Minister, this model will help ensure continuity of essential services while creating local economic opportunities and addressing operational inefficiencies.

He also noted that the reform aligns with the government’s broader development vision. “From the Ministry’s perspective, this reform aligns with the Government’s broader commitment to efficient and effective use of public resources. In pursuing Bhutan’s ambitious development goals, it is imperative that public and quasi-public institutions optimize resources without compromising access to critical services.”

The Ministry has assured that BDBL will remain accountable to communities during the transition and that financial inclusion will continue to be prioritised. The Minister said that the reforms should not be viewed as a withdrawal, but as an evolution in how services are delivered.

Despite these assurances, the transition has led to questions about the long term sustainability of rural finance. Many farmers and rural households still face challenges related to physical access, geographical barriers, connectivity issues, and limited digital literacy. While the Agency Banking model and outreach programmes are expected to bridge these gaps, their effectiveness will depend on implementation, community participation, and readiness of local technology and infrastructure.

The closure of the gewog offices marks more than just a cost reduction step. It represents a shift in the rural finance system. The challenge going forward lies in ensuring that the pursuit of efficiency does not come at the expense of equity. As the Minister emphasised, the evolving model must continue to protect financial inclusion even as institutions move toward improved sustainability. The future of rural banking will depend on how well this balance between reform and inclusive growth is achieved.