‘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:
- To accept deposits or to mobilize deposits through various financial instruments.
- To lend loan including hire-purchase, leasing, housing and overdrafts
- To lend loan on collateral of project and hypothecation
- To lend loans in the amount covered by the value of the movable or immovable assets.
- To issue guarantees on the behalf of its customers by obtaining and acquiring security, movable and immovable assets as collateral for mortgage.
- To supply or manage loans from the Government of Nepal or any agency for promotion of a project.
- To write- off credits subject to the prevailing credits write-off bylaws.
- To issue shares, debenture, bonds etc. for meeting capital fund
- To issue, accept, pay, discount, purchase or sell Letter of Credit, Bills of Exchange, Promissory notes, Cheques, drafts and other financial instruments.
- To carry on foreign exchange business under the jurisdiction of prevailing laws.
- To carry on government transactions under the conditions and direction of Nepal Rastra Bank
- To purchase, sell or accept treasury bills issued by Government of Nepal or Bonds issued by Nepal Rastra Bank.
- To remit or transmit amounts of different places within or outside Nepal.
- To conduct study, research and survey work relating to the establishment, operation and evaluation of project
- To manage properly or sell its assets of every type to come under its ownership according to BAFIA 2073.
- 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;
|Minimum Common Equity Capital Ratio||4.50%|
|Minimum Tier 1 Capital||6.00%|
|Minimum Total Capital||11.00%|