Development Banks are those financial institutions that are involved in the promotion and development of various industries, agriculture and other government identified key sectors. Section 49 of the Bank and Financial Institutions Act, 2073 has categorized development banks as ‘Kha’ or Class ‘B’ financial institutions. The primary objective of development banks is to promote development sectors by providing them with technical and economic assistance.
Development banks are categorised into three types based on the geographical coverage and activity level:
- 1-3 District Types
- 4-10 District Types
- National Types
As per the latest report by Nepal Rastra Bank, there are currently 17 development banks in Nepal.
| S.No. | Name of the bank | Operation Year |
| 1 | Mahalaxmi Bikas Bank Limited | 2017* |
| 2 | Narayani Development Bank Limited | 2001 |
| 3 | Saptakoshi Development Bank | 2019 |
| 4 | Garima Bikas Bank Limited | 2016* |
| 5 | Kamana Sewa Bikas Bank Limited | 2017* |
| 6 | Jyoti Bikas Bank Limited | 2016* |
| 7 | Sindhu Bikas Bank Limited | 2010 |
| 8 | Salapa Bikas Bank Limited | 2012 |
| 9 | Green Development Bank Limited | 2013 |
| 10 | Karnali Development Bank Limited | 2004 |
| 11 | Excel Development Bank Limited | 2005 |
| 12 | Miteri Development Bank Limited | 2006 |
| 13 | Muktinath Bikas Bank Limited | 2007 |
| 14 | Corporate Development Bank Limited | 2007 |
| 15 | Shine Resunga Development Bank Limited | 2013* |
| 16 | Lumbini Bikas Bank Limited | 2017* |
| 17 | Sangrila Development Bank Limited | 2013* |
Functions of Development Bank
Section 49, sub-section 2 of BAFIA 2073 has defined some of the functions of the development bank. Some of the specific functions of development bank are:
- To lend credit in collateral of a project, lend credits on the basis of consortium financing in collaboration with other banks or financial institutions.
- To issue guarantees on behalf of its customers
- To issue, accept, make payment, discountor purchase and sale of financial instruments.
- To accept loans in mortgage of movable and immovable assets.
- To conduct the transaction of letter of credit and remittance with prior approval of Rastra Bank
- To carry on the transaction of transfer of amount within Nepal.
- To exchange details, information, notices on debtors or customers who have obtained credit to Nepal Rastra Bank or other banking and financial institutions.