‘Ka’ or Class ‘A’ Banks or Commercial Banks of Nepal

‘Ka’ or Class ‘A’ Banks or Commercial Banks of Nepal

Bank and Financial Institution Act (BAFIA), 2073 has categorised Nepalese Banking and Financial System into four groups:

‘Ka’	Class ‘A’	Commercial Bank
‘Kha’	Class ‘B’	Development Bank
‘Ga’	Class ‘C’	Finance Company
‘Gha’	Class ‘D’	Micro Finance Company

As of mid-july 2018, there are 27 commercial banks in Nepal out of which 3 are public owned banks and 17 are domestic private banks and 7 banks are formed as a joint-venture. The list of commercial banks in Nepal are:

	Name of Banks	Date of Establishment	Share Capital (2018/19)
1	Nepal Bank Limited	1937/11/15	Rs. 9.811 billion
2	Rastriya Banjiya Bank Limited	2018/05/02**	Rs. 9.004 billion
3	Agriculture Development Bank Limited	1968/01/21	Rs. 14.448 billion
4	Nabil Bank Limited	1984/07/12	Rs. 9.011 billion
5	Nepal Investment Bank Limited	1986/03/09	Rs. 12.869 billion
6	Standard Chartered Bank Nepal Ltd.	1987/02/28	Rs. 8.011 Billion
7	Himalayan Bank Limited	1993/01/18	Rs. 8.520 billion
8	Nepal SBI Bank Limited	1993/07/07	Rs. 8.449 billion
9	Nepal Bangladesh Bank Limited	1994/06/06	Rs. 8.088 billion
10	Everest Bank Limited	1994/10/18	Rs. 8.106 billion
11	Kumari Bank Limited	2001/04/03	Rs. 8.686 billion
12	Laxmi Bank Limited	2002/04/03	Rs. 8.920 billion
13	Citizens Bank International Limited	2007/04/20	Rs. 8.033 billion
14	Prime Commercial Bank Limited	2007/09/24	Rs. 9.318 billion
15	Sunrise Bank Limited	2007/10/12	Rs. 8.152 billion
16	Century Commercial Bank Limited	2011/03/10	Rs.8.063 billion
17	Sanima Bank Limited	2012/02/15	Rs. 8.001 billion
18	Machhapuchchhre Bank Limited	2012/07/09**	Rs. 8.088 billion
19	NIC Asia Bank Limited	2013/06/30**	Rs. 8.864 billion
20	Prabhu Bank Limited	2016/02/12**	Rs. 8.892 billion
21	Siddhartha Bank Limited	2016/07/21**	Rs. 8.887 billion
22	Bank of Kathmandu Limited	2016/07/14**	Rs. 8.063 billion
23	Civil Bank Limited	2016/10/17**	Rs. 8.003 billion
24	Nepal Credit and Commerce Bank Limited	2017/01/01**	Rs. 7.018 billion
25	Mega Bank Nepal Limited	2018/05/13**	Rs. 10.386 billion
26	Global IME Bank Limited	201/04/09**	Rs. 10.310 billion
27	NMB Bank Limited	015/10/18**	Rs. 9.618 billion

** Joint Operation Date after Mergers and Acquisitions

Functions of Commercial Banks

Chapter 7 of BAFIA 2073 has mentioned some of the functions that are needed to be performed  by the Class ’A’ categorized banks. Some of the functions are:

1. To accept deposits or to mobilize deposits through various financial instruments.
2. To lend loan including hire-purchase, leasing, housing and overdrafts
3. To lend loan on collateral of project and hypothecation
4. To lend loans in the amount covered by the value of the movable or immovable assets.
5. To issue guarantees on the behalf of its customers by obtaining and acquiring security, movable and immovable assets as collateral for mortgage.
6. To supply or manage loans from the Government of Nepal or any agency for promotion of a project.
7. To write- off credits subject to the prevailing credits write-off bylaws.
8. To issue shares, debenture, bonds etc. for meeting capital fund
9. To issue, accept, pay, discount, purchase or sell Letter of Credit, Bills of Exchange, Promissory notes, Cheques, drafts and other financial instruments.
10. To carry on foreign exchange business under the jurisdiction of prevailing laws.
11. To carry on government transactions under the  conditions and direction of Nepal Rastra Bank
12. To purchase, sell or accept treasury bills issued by Government of Nepal or Bonds issued by Nepal Rastra Bank.
13. To remit or transmit amounts of different places within or outside Nepal.
14. To conduct study, research and survey work relating to the establishment, operation and evaluation of project
15. To manage properly or sell its assets of every type to come under its ownership according to BAFIA 2073.
16. To exchange details, information, notices on debtors or customers who have obtained credit to Nepal Rastra Bank or other banking and financial institutions.

Capital Adequacy Framework for Commercial Bank

Nepalese Banking and Financial system is in the phase of implementing  BASEL III accord. BASEL III is an internationally agreed set of measures developed by BASELl committee on Banking Supervision. The major focus of BASEL III is to strengthen the regulation, supervision and risk management of banks. Capital Adequacy standards are set as per the guidelines of the BASEL Committee. For commercial banks it is essential to maintain the capital adequacy ratios as per the followings;

Particulars	Requirement
Minimum Common Equity Capital Ratio	4.50%
Minimum Tier 1 Capital	6.00%
Minimum Total Capital	11.00%