Commercial Banks of Nepal | Everything You Need to Know

Commercial Banks in Nepal

NRB has classified financial institutions into four classes where commercial banks are classified as class “A” financial institutions in Nepal. They operate under the guidelines of Nepal Rastra Bank, the governing body of all financial institutions. List of classified financial institutions are as follows:

  1. “A” Class Commercial Banks
  2. “B” Class Development Banks
  3. “C” Class Finance Companies
  4. “D” Class Micro-finance Companies

There are currently 26 commercial banks in Nepal as on September 2022. Nepal Bank is the first commercial bank of Nepal established on 1937. Nabil Bank is the first private sector bank with largest market capitalization in banking industry of Nepal.

Banks deal in monetary transactions at national level. Main functions of these banks is to accept deposit & grant loans from and to its customers. Other functions of commercial bank are service of foreign exchange, letter of credit, Internet banking and many more.

Functions of Commercial Banks in Nepal

Credit Creation is the most important function of commercial bank. Along with accepting deposits, granting loans, issuing letter of credit and providing service of foreign exchange, commercial banks have several other functions which we have listed below.

A. Primary functions of Commercial Bank

1. Accepting Deposits

The bank accepts deposits from customers in the form of saving, current and fixed deposits. And provides certain interest rate as per the policy of banks.

2. Granting Loans

Creating credit is the main role of banks. These banks grants loans from the amount collected as deposits to customers at interest rates higher than they provide. In such way bank earns profit and it is the primary source of income for banks.

B. Secondary Function of Commercial Banks

3. Working as agency function

Commercial banks works as agents of their customers by helping them in collecting and paying cheques, insurance premiums, utility bills, rent, and other charges. Also, they help in collection of dividend and purchase and sale of foreign exchange.

4. Overdraft facilities

It is a facility provided by bank to its customers where users can withdraw up to certain amount of money even when they don’t have money in bank. Bank charges certain fees for this service.

5. Issuing Letter of Credit –

Letter of credit is very useful in foreign trade which is issued by banks to prove the credit worthiness of customers. It is a document sent from a bank or financial institute that guarantees a seller will receive a buyer’s payment on time.

6. Service of foreign exchange

It is a facility or service provided by banks to sale or purchase foreign currency held by customers with prior approval from central bank of Nepal.

7. Tax Consultant

Commercial Banks act as a tax consultant by providing the instruction, advice, process, and laws relating to tax and makes the clients more clear about the policies.

8. Locker facilities

Customers are provided with locker facilities at banks to keep their valuables or documents safely. The banks charge certain service charges and fees for providing this service.

9. Travelers Cheque

Specially designed for travelers going aboard for vacation, business, education or pleasure. Banks issue travelers cheque so that its customers can pay traveling costs safely during their travel.

10. Remittance

This is the major function of bank, the process of sending and receiving money from different place, national or international on the request of customer. It is done by the means of bank draft. T.T., mail transfer, wire transfer and several others.

List of Commercial Banks of Nepal (Class A)

The table below presents the list of 26 “A” class commercial banks operating in Nepal licensed by Nepal Rastra Bank. Date of operation mentioned in the table below is after the latest date of merger with other financial institutions.

S. NOBank NameDate of Operation (A.D)
1Nepal Bank Limited1937/11/15
2Agriculture Development Bank Limited1968/01/21
3Nabil Bank Limited1984/07/12
4Nepal Investment Bank Limited1986/03/09
5Standard Chartered Bank Nepal Limited1987/02/28
6Himalayan Bank Limited1993/01/18
7Nepal SBI Bank Limited1993/07/07
8Everest Bank Limited1994/10/18
9Kumari Bank Limited2001/04/03
10Laxmi Bank Limited2002/04/03
11Citizens Bank International Limited2007/04/20
12Prime Commercial Bank Limited2007/09/24
13Sunrise Bank Limited2007/10/12
14Century Commercial Bank Limited2011/03/10
15SANIMA Bank Limited2012/02/15
16Machhapuchchhre Bank Limited 2012/07/09
17NIC ASIA Bank Limited2013/06/30
18Prabhu Bank Limited2016/02/12
19Siddhartha Bank Limited2016/07/21
20Bank of Kathmandu Limited2016/07/14
21Civil Bank Limited2016/10/17
22Nepal Credit and Commerce Bank Limited2017/01/01
23Rastriya Banijya Bank Limited2018/05/02
24Mega Bank Nepal Limited2018/05/13
25Global IME Bank Limited2019/09/04
26NMB Bank Limited2019/09/28
Commercial Banks in Nepal

Here, we have mentioned some details about few commercial banks operating in Nepal.

Nepal Bank Limited (NBL)

Nepal Bank Limited (NBL) was established as the first bank of Nepal on 1994 B.S with an authorized capital of Rs.10 million, issued capital of Rs.2.5 million and paid up capital of Rs.0.842 million. The company has an authorized capital of Rs 15 Arab at present and is listed in Nepal Stock Exchange (NEPSE) as NBL.

You May Like to Read: Dividend History of Nepal Bank Limited (NBL)

Nabil Bank Limited (NABIL)

Nabil Bank Limited (NABIL) was established on 1984 operates with 230 branch offices, 254 ATMs, numerous POS terminals, remittance agents spread across the nation. The Bank also has over 170 international correspondent banking relationships. The Bank has always stayed true to its three strong pillars: Service Excellence, Technology, and Product innovation.

You May Like to Read: Dividend History of Nabil Bank Limited

Rastriya Banijya Bank Limited

Rastriya Banijya Bank Limited was established on 23 January 1966 and was fully owned by Government of Nepal. At present, the Bank operates as “A” class financial institution licensed by Nepal Rastra Bank and carries out commercial banking activities as per the provisions of the “Bank and Financial institutions Act 2073,” (2017). The Bank has been able to imprint its presence in national economy through efficient allocation of resources in all sectors of economy.

Rastriya Banijya Bank is the only commercial bank which is not listed in Nepal Stock Exchange Limited (NEPSE).

NIC ASIA Bank Limited (NICA)

NIC ASIA Bank (NICA) is one of the leading commercial bank of Nepal formed after merger between NIC Bank and Bank of Asia in 2013. The bank has 359 branches all over the country and is one of the largest bank in the country. NICA currently has a paid-up capital of Rs 11.56 Arab.

You May Like to Read: Dividend History of NIC ASIA Bank Limited (NICA)

NMB Bank Limited (NMB)

NMB Bank Limited (NMB) founded on 2008 is a “A” class financial institution licensed by Nepal Rastra Bank. It is one of the leading commercial bank of Nepal having joint Venture Agreement with Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO).

You May Like to Read: Dividend History of NMB Bank Limited (NMB)

SANIMA Bank Limited (SANIMA)

Sanima Bank Limited (SANIMA) was established on 2004 as a national level development bank. Since 2012 the bank has been operating as “A” class commercial bank licensed by Nepal Rastra Bank. The company has a paid-up capital of Rs 11.32 Arab and is operating with 99 branches all over Nepal.

You May Like to Read: Dividend History of Sanima Bank Limited (SANIMA)

Global IME Bank Limited (GBIME)

Global IME Bank Limited (GBIME) was established in 2007 as an ‘A’ class commercial bank in Nepal which provided entire commercial banking services. The Bank emerged after successful merger of Global Bank Ltd, IME Financial Institution and and Lord Buddha Finance Ltd. Since then GBIME have already made merger with several banks and financial institutions. Merger of GBIME with Bank of Kathmandu is the recent one.

You May Like to Read : Dividend History of Global IME Bank Limited (GBIME)

Prime Commercial Bank Limited (PCBL)

Prime Commercial Bank Limited (PCBL) was established in in September 2007 as the 21st commercial bank of Nepal. It has been established by prominent business personnel and professionals from diversified areas with a prime objective of providing ‘Banking Services to Everyone’ in the country. Counted among the top ten commercial banks its shares are actively traded in the Nepal Stock Exchange (NEPSE).

You May Like To Read : Dividend History of Prime Commercial Bank Limited (PCBL)

Frequently Asked Questions (FAQs)

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Commercial banks in Nepal are strictly monitored by NRB, they carry out functions as prescribed by their governing body. They provide ATM banking, Internet Banking, Mastercard Service to users. They are also known as the backbone of Nation. 25 of these banks are listed in Nepal Stock Exchange (NEPSE) and have provided returns to its shareholders in the form of bonus share & cash dividend.

You May Like to Read: Development Banks of Nepal | Everything You Need to Know

Read More: Earning Per Share (EPS) of Commercial Bank Listed in NEPSE

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