THE HISTORY OF BANKING IN NEPAL



The banking system on Nepal started with the establishment of Nepal Bank Limited in November 15,1937 AD (1994 BS).It was established by Juddha Shumsher (Rana prime minister of Nepal (1932-1945).Inaugurated by His Majesty King Tribhuvan. It was managed by Mr. Thakur Sing Kathait as chief manager from kartik 1994 BS. It's 40% of share was owned by government and 60% was owned by private sectors. The purpose of opening Nepal Bank Limited was to provide banking services to Nepalese people.

In 1956 (Baisakh 14,2013 BS) under the Nepal Rastra Bank act, 1955, the central bank of Nepal, Nepal Rastra Bank (NRB) was established to discharge the central banking responsibilities. Mr. Himalaya Shumsher JBR was the founding governor to lead Nepal Rastra Bank. Mr. Laxmi Nath Gautam and Mr. Pradyumana Lal Rajbhandari were the second and third governor of NRB respectively. Then the banking act, 2058(2002) was published and it's objectives were.

·      To formulate necessary monetary and foreign exchange policies for economic stability.

·      To increase the access of the financial service and increase public confidence towards the banking and financial system.

·      To develop a secure, healthy and efficient system of payment.

The largest commercial bank, Rastriya Banijya Bank (RBB) was established in january 23,1966 (10 magh 2022).RBB was established under "Rastriya Banijya Bank Act,2021" and operated under "Commercial Bank Act,2031".Then it was registered as public limited company on 6 Baisakh 2063(19 may 2006).

1984 was the year of financial sector liberation that established the first joint venture commercial bank, Nepal Arab Bank (Nabil Bank) as a welcoming step to allow foreign investment in Nepalese banking industry.

After that various commercial banks, development banks, micro finance companies, insurance companies, cooperatives etc were established. Now as of 2080 there are 20 "A" class commercial banks, 17 "B" class development banks, 17 "C" class finance companies and 57 "D" class micro finance companies in Nepal.

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