Banking History in Nepal

           In the context of Nepal, like as in other country the goldsmiths and landlord was the ancient banker. The Nepalese people were highly exploited by Shahu  Mahajan by charging higher interest rate i.e. compound interest rate and even by manipulating the principal amount. If we try to see the history of banking transaction in depth then evidence of money lending function are found in practice before 8^th century. In 780 B.S. Gunakamadev the ruler of Kathmandu reconstructed Kathmandu valley by borrowing debt from the people. In 14^th century Tanka dhari system had been running in the period of Ranodip Singh in Kathmandu established an office called Tejarath Adda. From this office the government distributed salary to their employees and provided loans to government employment @ 5% of interest against the security of gold, silver, etc.

               Because of the development of economic activities in Nepal the above institution could not be fulfilled the need of people. So in Kartik 30, 1994 B.S. Nepal Bank Limited was established as one of the semi government commercial bank which had 10 million authorized capital and 842000 paid up capital. It has done the pioneering function in function spreading the banking habits among the people. Having felt a need of central bank to control and direct the commercial bank and help the government for making monetary policies Nepal Rastra Bank was set up in 14 Baisakh 2013 B.S.

            To fulfill the growing credit requirement of the country, the commercial bank i.e. Rastriya Banijya Bank was establish in 10^th Bhadra 2022 B.S. This bank also provides facility for the economic welfare of the general public. Nepal is an agriculture country to develop agriculture system. Industry Agriculture Development Bank and Nepal Industrial Development Corporation was established in 2024 B.S. and 2016 B.S. respectively. 

          The initiation of the financial sector; liberalization policy by Nepal Rastra Bank, a board of joint venture banks entered with the view to accelerate the race of development of nation. At present, there are many joint venture banks which are running successfully in a competitive environment. His majesty government deliberates policy of allowing foreign joint venture banks to operate in Nepal basically targeted, to encourage local tradition commercial bank to enhance their capacity through competitor’s efficiencies mechanization modernization and prompt customer service. Nepal Arab Bank LTD was established in 2041 as a first foreign joint venture bank.

       Now in our country there are 25 commercial bank, 15 development bank, 48 finance companies, 34 co-operative organizations and 13 non-bank institutions after mid July 2007.