Types of Bank in Nepal

Types of Bank in Nepal
 Central Bank
 Commercial Banks
 Development Bank
 Finance Companies
 Micro Finance Institutions
CENTRAL BANK
A Central Bank is the bank in any country to which has been
entrusted the duty of regulating the volume of currency and credit in
that country.
It issues currency, regulates money supply, and controls different
interest rates in a country.
Apart from this, the central bank controls and regulates the activities
of all commercial banks In a country.
It can also be defined as the bank which stands as the leader of the
money market-also called the financial market-issues notes and coins,
supervises, controls and regulates the activities of the banking system
and acts as the banker of the government.
In Nepal, NRB operates as a central bank. The Nepal Rastra Bank (NRB)
was established in Baisakh 14, 2013 B.S. (April 26, 1956 A.D.)
Vision and mission
Vision
To become "A modern, dynamic, credible and effective
Central Bank"
Mission
To maintain macro-economic stability through sound
and effective monetary, foreign exchange and financial
sector policies.
Objectives of Nepal Rastra Bank
To formulate necessary monetary and foreign exchange
policies in order to maintain the stability of price and
balance of payment for economic stability and
sustainable development of economy, and manage it;
To increase the access of the financial service and
increase the public confidence towards the banking and
financial system by maintaining stability of the banking
and financial sectors,
To develop a secure, healthy and efficient system of
payment;
Commercial Bank (A Class)
A commercial bank is a financial institution which deals
with deposits and advances and other related services. It
receives money from those who want to save in the form
of deposits and it lends money to those who need it.
It also provides remittance facility to transfer money
from one place to another.
Generally, bank accepts deposits from business
institutions and individuals, which is mobilized into
productive sectors mainly business and consumer
lending. So it is also called a dealer of money.
Vision & Mission
 Building communities through responsible banking,
preferred by all stakeholders enabling customers and
clients achieve their financial goals thus contributing
towards prosperous Nepal.
 Helping clients and customers to achieve financial
security
 Utilizing the skill and potential of staffs
 Delivering banking products and services to create
delightful customer experience
 Being responsible for bringing positive environment
OBJECTIVES
o To offer wide variety of services to individuals and
business customers
o To collect payments including fees , charges and
interests on the products and services provided to
customers
o Help in monetary transactions as an agents of NRB
o Acts as trustee, executor, attorney etc.
Function o f Commercial Bank
 Primary Function
 Accepting deposits
 Lending of funds
 Help in foreign trade
 Foreign exchange
 Fixed deposit
Secondary Function
o Agency Services
 Collection and payment of credit instrument
 Purchase and sale of securities
 Collection of dividends on shares
o General Utility Services
 Locker Facility
 Letter of Credit
 Credit Cards
 Accepting Bills of Exchange
They do banking business to earn profit.
Development Bank
( Class B)
 The bank which is established for the development of
different sectors like industrial, agricultural,
infrastructural etc by imitating the modern system and
methodology through financial, technical and
administrative assistance is known as development
bank.
 Development banks in Nepal are playing vital roles for
the development of economy status of Nepal. Nepal
has many nationalized and private banking.
 There are 20 “B” class development banks in Nepal.
Functions of Development Bank
Development functions:
Establishment of industries, promotion and research
of technology
Helps an industrial organization
Indentifies priority sector
Maintain proper environment for investment
Analysis of product
Functions of Development Bank
 Banking Functions:
Grants loans
Remits money
Accepts deposits
Purchase and sales of shares
Serving with agency functions
FINANCE COMPANIES
(C CLASS)
Finance Companies are licensed by Nepal Rastra Bank
in 'Class C'.
Finance companies are those intermediaries, which link
the savers and users of capital. They collect small and
scattered saving of the individuals and mobilize it in the
productive sectors in the form of investment or loan.
There are 22 “C” class finance companies in Nepal. 19
out of the 22 finance in Nepal are national level finance
companies.
Nepal Finance ltd, Goodwill Finance ltd and Lalitpur Co
ltd are the finance companies in Nepal.
Mission, vision & objecti ves
 To develop and protect long-term member
value
 To make a real difference to the communities we
serve
 Maintaining high integrity
Some finance companies…
Micro Finance I n s ti t u ti o n s
(D Class)
 Micro finance Institutions (MFIs) are such organizations that provide
micro finance services.
 It is taken as an effective strategy for providing financial services to
those poor and disadvantaged groups who are far from formal
financial sector
 Microfinance has been recognized as an official poverty
alleviation tool in country
 It could help poor people who do not have any collateral, but a willingness to
work and desire to do some business activities from which he/she will acquire
employment as well as income.
 Focus on women for micro-credit.
 At present there are 41 Micro Credit Development Bank in Nepal.
 Nepal Garima Bikash Bank Ltd, Nirdhan Utthan Bank Ltd are the
Class D bank.
Mission, Vision & Objecti ves
 Facilitating poor to financial serving
 To uplift socio-economic condition of rural and
urban
 To contribute to reduce poverty free
prosperous society
 To develop micro finance on the national level
 Easy access to credit.
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