‘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 BanksDate of Establishment Share Capital (2018/19) 
1Nepal Bank Limited1937/11/15Rs. 9.811 billion
2Rastriya Banjiya Bank Limited2018/05/02**Rs. 9.004 billion
3Agriculture Development Bank Limited1968/01/21Rs. 14.448 billion
4Nabil Bank Limited1984/07/12Rs. 9.011 billion
5Nepal Investment Bank Limited1986/03/09Rs. 12.869 billion
6Standard Chartered Bank Nepal Ltd.1987/02/28Rs. 8.011 Billion
7Himalayan Bank Limited1993/01/18Rs. 8.520 billion
8Nepal SBI Bank Limited1993/07/07Rs. 8.449 billion
9Nepal Bangladesh Bank Limited1994/06/06Rs. 8.088 billion
10Everest Bank Limited1994/10/18Rs. 8.106 billion
11Kumari Bank Limited2001/04/03Rs. 8.686 billion
12Laxmi Bank Limited2002/04/03Rs. 8.920 billion
13Citizens Bank International Limited2007/04/20Rs. 8.033 billion
14Prime Commercial Bank Limited2007/09/24Rs. 9.318 billion
15Sunrise Bank Limited2007/10/12Rs. 8.152 billion
16Century Commercial Bank Limited2011/03/10Rs.8.063 billion
17Sanima Bank Limited2012/02/15Rs. 8.001 billion
18Machhapuchchhre Bank Limited2012/07/09**Rs. 8.088 billion
19NIC Asia Bank Limited2013/06/30**Rs. 8.864 billion
20Prabhu Bank Limited2016/02/12**Rs. 8.892 billion
21Siddhartha Bank Limited2016/07/21**Rs. 8.887 billion
22Bank of Kathmandu Limited2016/07/14**Rs. 8.063 billion
23Civil Bank Limited2016/10/17**Rs. 8.003 billion
24Nepal Credit and Commerce Bank Limited2017/01/01**Rs. 7.018 billion
25Mega Bank Nepal Limited 2018/05/13**Rs. 10.386 billion
26Global IME Bank Limited201/04/09**Rs. 10.310 billion
27NMB Bank Limited015/10/18**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 Ratio4.50%
Minimum Tier 1 Capital 6.00%
Minimum Total Capital 11.00%

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