Nepalese Financial System

Financial System Plays a vital role in the economy Intermediates with the flow of funds Mobilizes and allocates resources Is a complex but well integrated set of sub systems of:

Nepalese Financial System

Financial System Is a complex but well integrated set of sub systems of:
Financial Institutions Markets Instruments & Services

Nepalese Financial System

Financial System Financial systems are sometimes classified into Formal and informal systems. The formal financial system is characterized by organized and regulated system Whereas the informal system is characterized by unorganized and unregulated system.

Nepalese Financial System

Nepalese Financial System It can be looked at from :
Regulated by Regulators Regulated by itself

Nepalese Financial System

Nepalese Financial System Regulated by regulators There are three regulators in the Nepalese Financial System. They are:
Nepal Rastra Bank Securities Board Insurance Board

Nepalese Financial System

Nepalese Financial System Regulated by itself There are two financial institutions regulated by itself. They are:
Employee Provident Fund and Citizen Investment Trust

Financial System Regulators

Nepal Rastra Bank Insurance Board

Securities Exchange Board

Independently Regulated

Nepalese Financial System

Nepal Rastra Bank Commercial Banks Class A Category Finance Companies Class C Category Co-operatives Development Banks Class B Category Micro Credit Institutions Class D Category NGOes

Nepalese Financial System

Securities Exchange Board

Nepal Stock Exchange (NEPSE)

Nepalese Financial System

Insurance Board

Life Insurance

Non Life Insurance

Nepalese Financial System

Regulated By Itself

Employee Provident Fund

Citizen Investment Trust

Nepalese Financial System

(As of Paush 2067)

Category Commercial Banks Development Banks Finance Companies Micro Credit Dev. Banks Co-operatives NGOes Stock Exchange Life Insurance Companies Non Life Insurance Companies

Numbers 31 83 79 19 16 45 1 4 17

Nepalese Financial System

Number of Banks & Financial Institutions
1980 Com Banks Dev Banks Finance Cos. MFDB Cooperatves NGOes 2 2 1985 3 2 1990 5 2 1995 10 3 2000 13 7 45 7 19 2005 17 26 60 11 20 47 2006 18 30 70 11 19 47 2011 31 83 79 19 16 45

Nepalese Financial System

Capital Required for New Banks & Financial Institutions Rs in Crores Class A B C D
National Level Regional Level 4 to 10 Districts 1 to 3 Districts

200 64 20 10

---------------6

-----20 -----2

-----10 10 1

Nepalese Financial System

Bank & Financial Institutions: Deposits & Paid Up Capital (Updated As Of Jan 2011)

Rs in Billions

Institutions Share % 14

Deposits
Amount

Paid Up Capital Amoun t 18.73 Share % 37

No Commercial Banks 30

Share % 80

631.28

Development Banks
Finance Companies Micro Credit Dev Banks TOTAL

83
79 19 211

39
37 10 100

77.50
76.86 3.49 789.13

10
10 0 100.0

14.36
16.84 1.12 51.05

28
33 2 100.0

Important Laws Related to the Nepalese Banking Sector

Nepal Rastra Bank Act Bank And Financial Institutions Act Company Act Debt Recovery Tribunal Act Secured Transaction Act Insolvency Act