Function of commercial bank in Nepal

This post is about Function of Commercial Banks in Nepal. This post also includes functions, role and authority of commercial bank in Nepal.

Before going to the topic function of Commercial Banks in Nepal, Let’s discuss first what is bank?

Introduction of bank

A bank is an organization, which deals in money and credit. The bank may be a company, firm, business, organization or person, which is involved in lending and borrowing activities. In modern term, we can not say that bank activities are limited to just borrowing and lending. This is very primitive concept. In modern concept bank is an institution that deals in monetary transactions. Monetary transactions mean dealing in money and credit. It accepts the deposits from different sectors in different accounts and provides loans of different types to needed sector.

 

 

 

Some definitions of bank from experts:

According to R.S. Sayers, “a bank is an institution whose whole debts are widely accepted in settlement of other people’s debts.”

In the words of Crowthese, “the banker business is to take debts of other people to offer his own in exchange and thereby create money.”

According to Horace white, ‘bank is manufacturer of credit and money so facilitating exchange.”

Origin of the word “bank’

The word bank is derived from the Italian word ‘Banco’ that means bench. The early years, people transacted their business at benches in the market place in Italy. When people failed in business their benches, (Banco) was broken up and the word bankrupt derived. The word bench, which was termed as “banco” in Italy, was used, as Back” in German language, “banke” in French and “bank” is England So, the word bank derived to this world.

See Also: Central banking system in Nepal

Summary of Bank Introduction

Therefore, bank means ‘a financial institution which accepts deposits gives loan, exchange or issue money, performs financial functions, control credit and perform agency functions.

Introduction of Commercial bank

Commercial banks is an institution which accepts deposits, makes business loans, and offers related services. Commercial banks also allow for a variety of deposit accounts, such as checking, savings, and time deposit. These institutions are run to make a profit and owned by a group of individuals. In Nepal, Nepal Rastra bank is central bank of Nepal. Nepal Rastra bank, the governing body of banking and financial institution has categorized the bank and financial institution in four distinct categories. i.e. ‘A’ Class, ‘B’ Class, ‘C’ class and ‘D’ class institutions. Commercial banks are categorized under A class banks in Nepal. These categories of banks in Nepal differ according to capital and service provided by them.

Total number of commercial banks in Nepal

There are 31 commercial banks in Nepal. Click here to see the total name list of all the commercial banks in Nepal.

Function of commercial bank

1. Receiving Deposits:
This is the main function of commercial banks to collect savings of individuals and firms. They offer different types of deposits for the facility of the customers.

i. Current Account or Demand Deposits:

Any amount can be withdrawn from this account any time without any notice. No interest is allowed on this type of account.

ii. Saving Account:

This type of deposit account which is usually held by the middle class group. The
saving account carries lower rate of interest.
iii. Fixed Deposit:
Amount cannot be withdrawn before the fixed future date in this type of deposit. High interest is allowed in fixed deposit which is different according to period.

2. Advancing Loans:

This is the important function of the commercial bank. Credit is given to the people in different ways.
(a.): Making Loans:
There are three types of loans given to borrowers.
i. Short Term Loans:
These loans are advanced for the period of six months to one year. High Interest rate
Is charged on this type of accounts.
ii. Medium Term Loans:
Loans from one to five years are called medium term loans.
iii: Long Term Loans:
Loans which are advanced for the period, more than ten years are long term loans.

(b.): Bank Overdraft:
Banks allows their trustful customers to draw more than the deposit they have in the
Bank. Bank charges interest on overdraft.

(c.): Cash Credit:
Bank also gives credit against immovable property and interest is charged by the
bank.

(d.): Discounting of Bills:
This is income source of bank to discount bills of exchange. They charge nominal
Interest and discount only reputed and clear bills of exchange.

List Of Grade "A" Commercial Banks in Nepal. Currently, there are 32 Grade "A" Commercial Banks operating in Nepal. Below you'll find a list of all these banks with their respective web url and contact addresses. Image Banking Institutions - URL Contact Address Nepal Bank Ltd Nepal Bank Limited Dharmapath Kathmandu (Head Office) P.O.Box: 36, Kathmandu SWIFT Code: NEBLNPKA Tel.: +977 1 422 2397 Fax: +977 1 422 0414 Email: info@nepalbank.com.np Rastriya Banijya Bank Rastriya Bannijya Bank Central Office Singhadurbar Plaza, Kathmandu Tel: (977-1) 425-2595 Fax: (977-1) 425-2931 E-mail: rbb.info@rbb.com.np Nabil Bank Ltd Head Office Nabil House, Kamaladi, Kathmandu P.O. Box: 3729, Kathmandu Phone: 4430425, 4429546-47, 4435380-85 Telex: 2385 NABIL NP, 2431 NABILH NP Fax: 4429548 SWIFT: NARBNPKA Nepal Investment Bank Ltd KATHMANDU HEAD OFFICE Durbar Marg, P.O. Box 3412 Tel: 4228229, 4242530 (DISA) Fax: 977-1-4226349, 4228927 Swift: NIBL NP KT Standard Chartered Bank New Baneshwor Branch P.O.Box 3990, New Baneshwar, Kathmandu, Nepal Tel:977-1-4782333, 4783753 Fax No:977-1- 4780762 Himalayan Bank Ltd Head Office Karmachari Sanchaya Kosh Building Tridevi Marg, Thamel P.O. Box 20590, Kathmandu, Nepal. Telephones : 4227749, 4250201 Telefax : 977-1-4222800 Telex : 2789 HIBA NP, Swift HIMANPKA Email : himal@himalayanbank.com Nepal SBI Bank Ltd NEPAL SBI BANK LIMITED, HATTISAR, KATHMANDU, NEPAL TEL: 00-977-1-4435516, 4253243 FAX: 00977-1-435612 TELEX: 2796 NSBL NP WEBSITE:www.nepalsbi.com.np,www.nsbl.com.np E-MAIL:nsblco@nsbl.com.np SWIFT: NSBINPKA
Nepal Bangladesh Bank Ltd Head Office: (00) P.O.Box: 9062, New Baneswor, Kathmandu Tel: 4783972,4783975,4783976 Fax: 977-1-4780826 Email : nbblho@nbbank.com.np Everest Bank Ltd Baneshwor Main Branch Kathmandu, Nepal Phone: 977-1-4780018 (hunting) Fax: 977-1-4781025 Email: eblban@ebl.com.np Bank of Kathmandu Ltd Head Office Bank of Kathmandu Limited P.O. Box 9044, Kamal Pokhari, Kathmandu, Nepal SWIFT: BOKLNPKA Telex: 2820 BOK NP Tel: (977 1) 4414541 Fax: (977 1) 4418990 Email: info@bok.com.np NCC Bank Ltd Corporate Office / Kathmandu Main Branch NB Building, Bagbazar, Kathmandu, Nepal SWIFT : NBOCNPKA, Telex : 2843, 2812 Website : www.nccbank.com.np Phone : (01) 4246991; Fax : (01) 4244610 email : corporate@nccbank.com.np ncc@infocom.com.np Lumbini Bank Ltd Corporate Office: Durbar Marg, Kathmandu, Nepal. Tel: +977 1 4243158, 1 4243165 Fax: +977 1 4227590 SWIFT: LUBLNPKA email: info@lumbinibank.com.np NIC Bank Ltd Corporate Office 279 Kamaladi Sadak, Kathmandu, Nepal P. O. Box: 7367 Tel: 977 01 4262277 Fax: 977 01 4241865 Email:kamaladi@nicbank.com.np Machhapuchhre Bank Ltd Head Office Corporate Office Kathmandu Branch P.O. Box: 41 Naya Bazar Pokhara, Nepal Tel: +977-61-530900 Fax: +977-61-530500 Email: mblbnk@mbl.com.np SWIFT Code: MBLNNPKA Kumari Bank Ltd Kumari Bank Limited Putali Sadak, Kathmandu Nepal Phone : 977-01-4-232112 977-01-4-232113 Fax : 977-01-4-231960 Telex : 2853 KUMARI NP Swift : KMBLNPKA Email : info@kbl.com.np Laxmi Bank Ltd Hattisar Branch & Corporate Office Hattisar, Kathmandu, Nepal Tel. 01-4444684/4444685 Fax 01-4444640/4444743 SWIFT: LXBLNPKA Email: info@laxmibank.com Siddhartha Bank Ltd CORPORATE OFFICE 130/23, HATTISAR, KAMALADI KATHMANDU P.O. BOX : 13806 TEL. : 01-4442919, 01-4442920 FAX : 977-1- 4442921, Telex. 2757 SBL Swift-SIDDNPKA EMAIL : sbl@siddharthabank.com
Agriculture Development Bank Ltd Head Office, Ramshah Path Kathmandu, Nepal Tel : 977-1-4262885/4262596 Fax : 977-1-4262616/4262929 Email : info@adbn.gov.np Global Bank Ltd Corporate Office Panipokhari, Kathmandu P.O. Box: 19327, Nepal Phone No: 4002507 / 4002508 Fax: 4441502 Citizens Bank International CITIZENS BANK INTERNATIONAL LIMITED P.O.BOX: 19681 , SHARDA SADAN KAMALADI, KATHMANDU, NEPAL TEL: 977-1- 4262699 FAX: 977-1-4265030 EMAIL: info@ctznbank.com URL: www.ctznbank.com / www.citizensbank.com.np Prime Commercial Bank Ltd Prime Commercial Bank Ltd. Bira Complex, New Road, Kathmandu , Nepal Phone No : 4233388 Fax : 4233390 Swift : PCBLNPKA Email : info@pcbl.com.np Bank of Asia Nepal Ltd Head Office Tripureswore Kathmandu Metropolitan City - 11 P.O. Box: 11021 Nepal Tel No: + 977 1 4263212/4263218 Fax No: + 977 1 4258326 Email: boan@bankofasia.com.np Sunrise Bank Ltd Sunrise Bank Limited P.O. Box: 15203 Gairidhara Crossing, Kathmandu, Nepal Tel: 4004560, 4004561, 4004562 Fax: 977-1-4422475 SWIFT: SRBLNPKA Grand Bank Nepal Limited DCBL Bank Ltd. is contemplating for changing its present name "DCBL Bank Ltd." to "Grand Bank Nepal Ltd." effective from 1st Baishak 2069.) DCBL Bank Limited Kathmandu Plaza, First Floor, Kamaladi GPO Box: 7716, Kathmandu, Nepal Tel no: 4168605, 4168606, 4168607, 4168608 4168610, 4168612, 4168613, 4168615 Fax: 977-1-4168609 Swift : DCBNNPKA E-mail: info@dcbl.com.np NMB Bank Ltd NMB Bank Limited Babarmahal. GPO Box - 11543 Kathmandu, Nepal Phone: 977-1-4246160 Fax: 977-1-4246156 Emaill: info@nmb.com.np Kist Bank Ltd Main Branch KIST Building ,Anamnagar, Kathmandu Phone : +977-1-4232500 Fax No.:+977-1-4228588 E-Mail : main@kistbank.com E-Mail : info@kistbank.com Post Box No.:8975, EPC. : 5157 Janata Bank Nepal Ltd Janata Bank Nepal Ltd. Shankhamul Marg, 10 New Baneshwor, Kathmandu POBox:23600 Tel. 4786100/4785900 Fax. 4786300 Email. info@janatabank.com.np Mega Bank Nepal Ltd MEGA Bank Nepal Limited Corporate Office Mega Mahal, Kantipath, Nepal. Ph:977-1-4257711, Fax: 977-1-4266599 Commerz and Trust Bank Nepal Ltd. Commerz and Trust Bank Nepal Ltd. Tindhara Road, Kamaladi, Kathmandu. House No: 130/23 P. O. Box: 23399 Phone: 4446150, 4446151 Fax : 4444770 Email: info@ctbn.com.np Civil Bank Ltd. Head Office: Civil Bank Ltd. Classic Complex, Tindhara Road, Kamaladi, Kathmandu-31 P.O. Box: 9799 Tel No: 4255551, 4255523 Fax No: 4255500 Century Commercial Bank Limited Century Commercial Bank Limited. Putalisadak, Kathmandu, Nepal. Swift Code : CCBNNPKA Phone: 977-1-4445062 (Hunting No.) 977-1-4412579 977-1-4428392 Fax: 977-1-4441422 Post Box No: 26100 Email: welcome@centurybank.com.np Sanima Bank Limited Sanima Bank Limited Alakapuri, Narayanchaur, Naxal, Kathmandu G.P.O. Box: 20394 Phone: +977-1- 4428977, 4428979, 4428980 Fax: +977-1-4428969 SWIFT: SNMANPKA Email: sanima@sanimabank.com