Kathmandu, May 22: Nepal’s banking sector went into a tizzy today after several banks received letters from the Maoist rebels demanding donations of up to Rs 1 crore from each of them.

Sixteen of the 20 banks, who have their headquarters in Kathmandu, received the letters from the local unit of the Maoist group, outlining their agenda and “achievements” in the last few years. The letter was signed by the group’s central commander Anantha.

The letter also claims that the rebels had effectively ended the reign of the Shah dynasty and put Nepal on the road to becoming a democratic republic. In the letter, Anantha demands a specific amount from the banks as “financial assistance” to fund their movement. While some smaller banks have been asked to pay between Rs 10 lakhs and Rs 50 lakhs, the larger banks have been asked to cough up Rs 1 crore each.

The banks are meeting here tomorrow to decide on how to deal with the situation. Some banks have already contacted the rebel leaders, including Maoist spokesman Krishna Bahadur Mahara who arrived here last night as part of the Maoist team which will hold peace talks with the Koirala government.

Mahara told an FM station that his party was extremely optimistic about the peace talks. “We have great hopes of bringing lasting peace in Nepal,”he said, adding that his party should not be pushed into taking up arms again.

Several industries in the Bara-Parsa belt of southern Nepal, including an Indo-Nepal joint venture which had shut down due to Maoist pressure, re-opened on Friday after talks with the rebel group’s trade union. Earlier today, Koirala expanded his cabinet by adding five new ministers and six junior members to his team, raising its strength to 18.