Development Banks of Nepal | Everything You Need to Know

There are 17 development banks operating in Nepal. These banks are registered at “Company Register Office” under Company act 2063 and is licensed by Nepal Rastra Bank under banking and financial act 2063 as ‘B’ class bikas bank. The history of Development Banks in Nepal is supposed to have commenced with the establishment of Nepal Industrial and Development Corporation (NIDC).

Because of Development banks, people now have choices to fulfill their banking needs at their door steps and have played crucial role to inculcate the banking habits of rural people at mass level. Development Banks help in advancement of backward units by means of financial and technical assistance.

NRB has classified financial institutions into four classes where development banks of Nepal are classified as class “B” financial institutions. Development Banks of Nepal are the financial institutions that provide medium and long-term finance for the promotion and development of various industries, agriculture and other key sectors identified by government.

Functions of Development Banks of Nepal

Development banks of Nepal are established to carry out certain functions and meet the objectives. Here, we have listed the major functions of development banks of Nepal.

1. Accepting Deposits

Primary function of development banks of Nepal is to accept deposits in the form of savings, fixed deposits from customers with or without interest and mobilize them through various financial instruments.

2. Granting Loans

Development Banks of Nepal grants loans for hire purchase, leasing, housing against collateral. They also provide loans or manage loans from funds received through Nepal Government or other domestic or foreign bodies for the promotion of projects, industries and agriculture sectors.

3. Service of foreign exchange

Conducting exchange or transactions of foreign currencies on behalf of customers with subject to prevailing laws and regulations.

4. Working as Commission Agent

Acting as a commission agent on behalf of the customers by taking charge in buying and selling of shares, debentures, securities, paying cheques, insurance premiums, utility bills, rent, and other charges. Collecting dividend of shares, debenture or security interest etc. and sending the dividend, profit or interest within Nepal or abroad by charging commission.

5. Promotion of Projects

Development Banks help in advancement of projects, development of infrastructure by means of financial and technical assistance. It helps in credit creation or collection from funds received through the Government of Nepal or other domestic or foreign bodies.

6. Locker Facilities

One of the main function of development banks is arranging safe deposit vault for the customers. Clients are provided with locker facilities at these banks to keep their valuables or documents safely.

7. Advancement of Backward Units

For the economic upliftment of poor class, low-income families, victims of natural calamities and residents of any region of the country, development banks provides loans up to the amount as specified by Central Bank.

8. Purchase and Sale of Assets

Under the prevailing rules and regulations, development banks of Nepal are allowed to properly manage and sell all types of assets that come into their possession. They should give detailed information regarding purchase and sale of assets like shares and debentures to central bank.

9. Travelers Cheque

Providing travelers cheque to customers going aboard for vacation, business, education or pleasure. So that they can pay traveling costs safely. Along with travelers cheque they issue promissory notes and bills of exchange.

10. Other Works

Other functions of development bank is to work as prescribed by central bank of Nepal. Like doing money transfer (Remittance), property loan evaluation, project installation and operation, providing training and consultation etc. And providing service and information to clients.

List of Development Banks of Nepal (Class B)

The table below presents the list of 17 “B” class development banks of Nepal licensed by Nepal Rastra Bank (NRB).For the last three years, the number of development banks in Nepal is decreasing due to the merger and acquisition policy adopted by NRB. Date of operation mentioned in the table below is after the latest date of merger with other financial institutions.

S. NO	Bank Name	Date of Operation
1	Narayani Development Bank Limited	2001/10/17
2	Karnali Development Bank Limited	2004/02/18
3	Excel Development Bank Limited	2005/07/21
4	Miteri Development Bank Limited	2006/10/13
5	Muktinath Bikas Bank Limited	2007/01/03
6	Corporate Development Bank Limited	2007/11/07
7	Sindhu Bikas Bank Limited	2010/09/09 B
8	Salpa Bikas Bank Limited	2012/07/16
9	Shine Resunga Development Bank Limited	2013/03/17
10	Green Development Bank Limited	2013/08/25
11	Shangrila Development Bank Limited	2014/07/13
12	Jyoti Biaksh Bank Limited	2016/08/12
13	Garima Bikas Bank Limited	2016/09/20
14	Mahalxmi Bikas Bank Limited	2017/07/02
15	Lumbini Biaks Bank Limited	2017/07/09
16	Kamana Sewa Bikas Bank Limited	2017/08/04
17	Saptakoshi Development Bank Limited	2019/07/07

Development Banks of Nepal

Here, we have mentioned few details about some development banks operating in Nepal.Out of 17 development banks of Nepal, Salpa Bikas Bank is not listed in NEPSE.

Narayani Development Bank Limited (NABBC)

Narayani Development Bank Limited is a district level development bank of Nepal with operation date on 2001 A.D. with working areas at (Nawalparasi, Chitwan and Makawanpur). The Bank provides customer-focused financial services to its valued customers in a very friendly environment.

Paid-up capital of Narayani Development Bank as of Mid July, 2022 is Rs 26.25 crores.

Miteri Development Bank Limited (MDB)

Miteri Development Bank Limited is a national level development bank of Nepal with operation date on 2006 A.D. with head office at Sunsari. The bank is promoted by a group of experienced and highly motivated individuals from all groups like businessman, professional bankers, doctors, entrepreneurs, educationalists and technocrats.

Paid-up capital of Miteri Development Bank as of Mid July, 2022 is Rs 90.34 crores.

Muktinath Bikas Bank Limited (MNBBL)

Muktinath Bikas Bank Limited is a national level development bank of Nepal with operation date on 2007 A.D. with head office at Kathmandu. The Bank is offering wide range of financial products and services to this segment supported by access through multiple channels, digital solutions and strategic partnerships.

Paid-up capital of Muktinath Bikas Bank as of Mid July, 2022 is Rs 565.72 crores.

Garima Bikas Bank Limited (GBBL)

Garima Bikas Bank Limited is a national level development bank of Nepal with operation date on 2016 A.D. and head office at Kathmandu. The bank is now operating 120 branches, 1 extension counter and 51 ATMs throughout the country strategically placed for the convenience of customers.

Paid-up capital of Garima Bikas Bank as of Mid July, 2022 is Rs 457.99 crores.

Jyoti Biaksh Bank Limited (JBBL)

Jyoti Biaksh Bank Limited is a national level development bank of Nepal with operation date on 2016 and head office at Kathmandu. The Bank currently has 119 branches across the county including 3 extension counter. The bank during the time of establishment focused on promoting hydropower sector by lending credit facilities.

Paid-up capital of Jyoti Biaksh Bank as of Mid July, 2022 is Rs 426.78 crores.

Mahalxmi Bikas Bank Limited (MLBL)

Mahalxmi Bikas Bank Limited is a national level development bank of Nepal with operation date on 2017 and head office at Kathmandu. The bank focuses on implementing prolong business practices through consistent growth to all its stakeholders for sustainability and profitability with the long term mission of Innovation, Improvement, Corporate Governance, and Culture. The bank has 103 branches and offers banking services to over 500 thousand customers.

Paid-up capital of Mahalxmi Bikas Bank as of Mid July, 2022 is Rs 401.09 crores.

Lumbini Biaks Bank Limited (LBBL)

Lumbini Biaks Bank Limited is a national level development bank of Nepal with operation date on 2017 A.D. and head office at Kathmandu. The bank has undergone merger with five Banks and financial Institutions where last merger of Vibor Society Development Bank and Lumbini Finance and Leasing took place on 25th Ashad 2074. The bank currently has 86 branches and more than 600 satffs.

Paid-up capital of Lumbini Biaks Bank as of Mid July, 2022 is Rs 328.43 crores.

You May Like to Read: Dividend History of Lumbini Bikas Bank (LBBL)

Kamana Sewa Bikas Bank Limited (KSBBL)

Kamana Sewa Bikas Bank Limited is a national level development bank of Nepal established on 2017 and head office at Kathmandu. The bank is promoted by highly prominent business personalities/ groups and reputed individuals of the region who have excelled in their field of business/profession with very good integrity and social standings.

Paid-up capital of Kamana Sewa Bikas Bank as of Mid July, 2022 is Rs 314.26 crores.

FAQS About Development Banks of Nepal

[sp_easyaccordion id=”1596″]

Conclusion

Development Banks of 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 focus on development of backward community by granting loans and credit creation. 16 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.