Banking in Nepal began with the establishment of Nepal Bank Limited in 1937, marking the country's first formal financial institution. The sector gained momentum with the founding of the Nepal Rastra Bank (NRB) in 1956, which became the central regulatory authority. Over the decades, Nepal transitioned from a state-dominated banking model to a liberalized, competitive financial ecosystem. [1] [2] [3] [4] [5]
The banking system is governed by the Nepal Rastra Bank Act, Bank and Financial Institutions Act (BAFIA), and various NRB directives. [6] NRB classifies financial institutions into four categories:
| Class | Type | Description |
| A | Commercial Banks | Full-service banks with national reach |
| B | Development Banks | Focused on regional development financin |
| C | Finance Companies | Provide hire purchase, leasing, etc. |
| D | Microfinance Institution | Target low-income and rural populations |
According to NRB reports: [7] [8]
| Banks/BFIs Class | No. of BFIs | No. of Branches |
|---|---|---|
| Commercial Banks (A) | 20 | 5,099 |
| Development Banks (B) | 17 | 1,132 |
| Finance (C) | 17 | 291 |
| Microfinance (D) | 54 | 6,522 |
| Infrastructure Development Bank | 1 | - |
| Total | 109 | 13,044 |
Deposit Accounts: 5.91 crore (exceeding Nepal's population of ~3 crore)
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