Development Banks in Nepal [MAY 2022]

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. 1-3 District Types
  2. 4-10 District Types
  3. National Types

As per the latest report by Nepal Rastra Bank, there are currently 17 development banks in Nepal.

S.No.Name of the bankOperation Year
1Mahalaxmi Bikas Bank Limited2017*
2Narayani Development Bank Limited 2001
3Saptakoshi Development Bank2019
4Garima Bikas Bank Limited2016*
5Kamana Sewa Bikas Bank Limited2017*
6Jyoti Bikas Bank Limited2016*
7Sindhu Bikas Bank Limited2010
8Salapa Bikas Bank Limited2012
9Green Development Bank Limited2013
10Karnali Development Bank Limited2004
11Excel Development Bank Limited2005
12Miteri Development Bank Limited2006
13Muktinath Bikas Bank Limited2007
14Corporate Development Bank Limited2007
15Shine Resunga Development Bank Limited2013*
16Lumbini Bikas Bank Limited2017*
17Sangrila Development Bank Limited2013*

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:

  1. To lend credit in collateral of a project, lend credits on the basis of consortium financing in collaboration with other banks or financial institutions.
  2. To issue guarantees on behalf of its customers
  3. To issue, accept, make payment, discountor purchase and sale of financial instruments.
  4. To accept loans in mortgage of movable and immovable assets.
  5. To conduct the transaction of letter of credit and remittance with prior approval of Rastra Bank
  6. To carry on the transaction of transfer of amount within Nepal.
  7. To exchange details, information, notices on debtors or customers who have obtained credit to Nepal Rastra Bank or other banking and financial institutions.

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