The Central Bank has rated the development bank in Nepal as the B-Class bank. The national ranking of the financial institution is second following the commercial banks.
Opening the development bank was easy, as the government thought that more financial institutions would allow all kinds of people to access financial services. Under this initiative, Many development banks were established and approved by the central bank.
That concept brings weakness to the financial markets. It was difficult for the central bank to regulate them, because of, many financial institutions in the market.
Therefore, on the one hand, the government introduced the merger policy. And, on the other hand, increased the paid-up capital.
Result for that, several banks merged with commercial banks and some merged with the finance companies to meet the government requirement. By mid-April 2020, only 23 development banks have remained and the number will fall in the future.
Although 1 year has passed since the NRB raised the paid-up capital, many development banks have not met the requirements of the central bank.
There are three types of development banks in Nepal depending on their paid-up capital and area of operations.
- 1- 3 districts operation
- 4- 10 districts operation
- nationwide operation.
The present requirement of paid-up capital for the development bank is NRs.500 million, 1.2 billion, and 2.5 billion respectively. Despite, the categorization they provide similar services.
The functional area of a development bank in Nepal
list of a development bank in Nepal
S.NO. | Name | Operation Date (A.D.) | Head office | Paid up Capita RS.Corer | Working Area | |
---|---|---|---|---|---|---|
1 | Narayani Development Bank Ltd. | 2001/10/17. | Ratna Nagar, Chitawan | 5.56 | 1-3 District Level | (Nawalparasi,Chitwan, Makawanpur) |
2 | Sahayogi Vikas Bank Ltd. | 2003/10/23 | Janakpurdham, Dhanusha | 50.97 | 1-3 District Level | (Dhanusa,Mahottari, Sindhuli) |
3 | Karnali Development Bank Ltd. | 2004/02/18 | Nepalgunj, Banke | 50.28 | 1-3 District Level | (Banke, Bardiya,Dang) |
4 | Excel Development Bank Ltd. | 2005/07/21 | Birtamod, Jhapa | 69.27 | 1-5 District Level | (Ilam, Jhapa,Morang, Sunsari, Panchthar) |
5 | Miteri Development Bank Ltd. | 2006/10/13 | Dharan, Sunsari | 69.34 | 1-5 District Level | (Jhapa, Morang,Sunsari,Dhankuta, Udaypur) |
6 | Muktinath Bikas Bank Ltd. | 2007/01/03 | Kamaladi, Kathmandu | 432.5 | National Level | |
7 | Corporate Development Bank Ltd. | 2007/11/07 | Birgunj, Parsa | 37.06 | 1-3 District Level | (Parsa,Makawanpur, Kavrepalanchowk) |
8 | Sindhu Bikas Bank Ltd. | 2010/09/09 | Barhabise, Sindhupalchowk | 50 | 1-5 District Level | (Sindhupalchowk, Kavre, Dolkha, Makawanpur, Chitwan) |
9 | Sahara Bikas Bank Ltd. | 2010/10/27 | Malangawa, Sarlahi | 16.34 | 1 District Level | (Sarlahi) |
10 | Salapa Bikash Bank Ltd. | 2012/07/16 | Diktel, Khotang | 2.8 | 1 District Level | (Khotang) |
11 | Green Development Bank Ltd. | 2013/08/25 | Baglung Bazar, Baglung | 50 | 1-5 District Level | (Baglung, Myagdi,Kaski, Tanahu, Nawalparasi East) |
12 | Sangrila Development Bank Ltd. | 2014/07/13 | Baluwatar, Kathmandu | 260.66 | National Level | |
13 | Deva Development Bank Ltd. | 2015/07/10 | Laldurbar, Kathmandu | 317.71 | National Level | |
14 | Kanchan Development Bank Ltd. | 2009/09/19 | Mahendranagar, Kanchanpur | 58.44 | 1-5 District Level | (Kailali, Kanchanpur,Dadeldhura,Baitadi, Doti) |
15 | Shine Resunga Development Bank Ltd. | 2013/03/17 | Butawal, Rupandehi | 262.29 | National Level | |
16 | Jyoti Bikas Bank Ltd. | 2016/08/12 | Kamaladi, Kathmandu | 349.53 | National Level | |
17 | Garima Bikas Bank Ltd. | 2016/09/20 | Lazimpat, Kathmandu | 323.87 | National Level | |
18 | Mahalaxmi Bikas Bank Ltd | 2017/7/2 | Durbar Marg, Kathmandu | 307.21 | National Level | |
19 | Gandaki Bikas Bank Ltd. | 2017/7/5 | Pokhara, Kaski | 275 | National Level | |
20 | Lumbini Bikas Bank Ltd. | 7/9/2017 | Dillibazar, Kathmandu | 271.63 | National Level | |
21 | Kamana Sewa Bikas Bank Ltd. | 2017/8/4 | Gyaneshwor, Kathmandu | 254.02 | National Level | |
22 | Saptakoshi Development Bank Ltd. | 2019/07/07 | Dhankuta , Koshi | 78.71 | 1-7 District Level | (Morang, Ilam,Panchthar, Jhapa, Sunsari, Dhankuta,Terhathum) |
23 | Tinau Mission Bikas Bank Ltd. | 2006/11/01 | Butwal, Rupandehi | 167.58 | 1-7 District Level | (Rupandehi,Nawalparasi East, Nawalparasi West,Chitwan, Palpa, Dang, Kapilvastu) |
Development banks in Nepal give their customers a high interest in deposits and they also have a high interest in their loan products. Most of the development banks provide the modern banking including, ATM, mobile banking, and internet banking.
However, the B-Class banks in Nepal run with a high-profit margin they have no choice without merging with other financial institutions to meet the government requirement of paid of Capital or raise the fund internally for paid of Capital.