Banking History of Nepal

In this post, the concept of Banking History of Nepal is quite clear and very easy to understand.

 

BANKING HISTORY IN NEPAL

        A closer look at the banking history of Nepal reveals that before the advent of the modern banking system, various moneylenders (Gold Smiths) used to transact loans and the coins minted by the kings in their ruled time were introduced.

· Introduction of Institutional Banking System, Tejarath Adda was established in 1932 B.S.(Rana Prime Minister Ranoddeep Singh) and its basic purpose was to provide credit facilities to the general public and government employees at an affordable interest rate of 5 percent per annum.

· In 1989 B.S. Taksar / Sadar Muluki Khana was established and Rs.1,5,10 and 100 rupees four types of paper notes were published first time in Nepal on 2002/06/01 B.S. which are now called old print.

· Introduction of Modern Banking System in Nepal According to the Nepal Bank Act, 1993, Nepal Bank was formally established on 30th Kartik, 1994 B.S. It played the role of both Central Bank and Commercial Bank in the banking system of Nepal at that time but it could not issue notes.

· As required by the Central Bank in the banking system of Nepal. In 2013 Baishak 14 B.S. Nepal Rastra Bank was established as the Central Bank of Nepal in accordance with the Nepal Rastra Bank Act, 2012.

· Nepal Industrial Development Corporation was established on Ashad 1, 2016 B.S. to develop Nepal's industrial sector.

· According to the Cooperative Banks Act, 2019, the Cooperative Bank was established on Bhadra 28, 2019 B.S.

· Rastriya Banijya Bank was established on Magh 10, 2022 B.S. under the Commercial Banks Act, 2021 with full ownership of the Government of Nepal.

· For the development and expansion of the agricultural sector, the Agriculture Development Bank was established on 7th Magh, 2024 B.S. as per the Agriculture Development Bank Act, 2024 B.S. and when it was established, the cooperative bank was merged in it. And in the fiscal year 2032/33 B.S. Saana Kishan Bikash Aayojana was started from Tupche (Nuwakot) and Mahendranagar (Dhanusha) in which the Agriculture Development Bank assisted by providing loan.

· In the Fiscal Year 2040/41 B.S. the era of economic liberalization in the banking sector of Nepal began with the opening of various private and joint venture banks in which consequences the then Nepal Arab Bank Limited and now Nabil Bank Limited was established on 29th Ashad, 2041 BS.

· On Falgun 16, 2041 B.S. the then Nepal Indosuez Bank Limited was established as the current Nepal Investment Bank Limited.

Similarly, various banks were set up with private and joint ventures, which led to a quantitative rather than a qualitative increase in the banking system of Nepal.

In order to develop the banks qualitatively rather than numerically, Nepal Rastra Bank adopted the merger policy in the year 2068 B.S. The acquisition policy was adopted in 2070 B.S and these two policies were reformed as Merger and Acquisition bylaw in 2073 B.S. As a result, various banks and financial institutions have merged.

 

Therefore, it will play an important role in economic stability and development if we can make Nepal's banking system stable and efficient by combining qualitative development rather than numerical growth of banks.

 

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