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List of Commercials Bank in Nepal | Function of Commercial Bank

List of Commercials Bank in Nepal
List of Commercials Bank in Nepal



A commercial bank is a financial institution that accepts deposits from the public, provides funds to those who need them, and facilitates transfers from one place to another. Nepal Bank Ltd was established in 1994 B.S (1937 A.D). Nepal Bank Ltd was the first Bank of Nepal and the First Commercials Bank of Nepal. The Second Commercials Bank of Nepal was 'Rastriya Banijya Bank' and it was established in 2022 B.S  (1966 A.D) by Nepal Government. Now there are 26 commercials bank in Nepal which was mentioned below; 

No.

Bank’s Name

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15

16

17

18

19

20

21

22

23

24

25

26

 

Nepal Bank Ltd.

Agriculture Development Bank Ltd.

Nabil Bank Ltd.

Nepal Investment Bank Ltd.

Standard Chartered Bank Nepal Ltd

Himalayan Bank Ltd.

Nepal SBI Bank Ltd.

Everest Bank Ltd

Kumari Bank Ltd.

Laxmi Bank Ltd.

Citizens Bank International Ltd.

Prime Commercial Bank Ltd.

Sunrise Bank Ltd.

Century Commercial Bank Ltd.

Sanima Bank Ltd.

Machhapuchhre Bank Ltd.

NIC Asia Bank Ltd.

Global IME Bank Ltd.

NMB Bank Ltd.

Prabhu Bank Ltd.

Siddhartha Bank Ltd.

Bank of Kathmandu Ltd.

Civil Bank Ltd.

Nepal Credit and Commerce Bank Ltd.

Rastriya Banijya Bank Ltd.

Mega Bank Nepal Ltd.

 



Functions:
1. Primary function: 
                         The main function of commercial banks is to collect deposits and make loans. These functions are explained below:
A. Accepting deposits: 
                                     The first major function of commercial banks is to accept deposits, and accepting deposits into multiple accounts is an important function of commercial banks. The main forms of deposit accepted by commercial banks are as follows.
a. Demand deposits: 
                            Demand deposits are also known as demand deposits. This account is usually maintained by merchants and entrepreneurs who have to make multiple payments each day. Depositors can withdraw as much and as often as they want from this account. Generally, no interest is paid on this account. In this account, depositors are given a passbook containing details and a checkbook to withdraw money. 

b. Savings Deposit:
                             This account is generally kept by low-income citizens and those who do not need to withdraw money frequently. Certain restrictions are imposed on depositors regarding the number and amount of withdrawals during a given period. 
c. Fixed deposit:

                       The fixed deposit is also known as a time deposit. Money is deposited in this account for a fixed period and cannot be withdrawn before the expiration of that period. The interest rate on this account is higher than the savings deposit. In this deposit, the checkbook is not given to the depositor.

B. Credit:   
          The second important function of a commercial bank is to provide credit to citizens. A bank earns profit by transferring its deposits in the form of loans. Since a bank creates a loan from your deposit, it is called a lender. Banks charge interest on loans that is usually higher than what they offer on deposits. The main types of loans offered by commercial banks are as follows; 
a. Cash Credit: 
                      Cash credit is a type of loan given to the borrower against his current assets like stocks, shares, bonds, etc. Such loans are not based on personal security. The bank opens an account in the name of the borrower and pursues him to withdraw the borrowed money from time to time up to a certain limit determined by the value of his current assets. Interest is charged only on the amount actually withdrawn from the account. 
b. Overdraft: 
                 Commercial banks sometimes offer overdraft services to their customers through which they are allowed to withdraw more of the deposit. Clients are charged interest on overdrawn amounts. 
c. Loans and advances: 
                                 Loans and advances are mostly long-term loans given by banks to individuals and institutions. Loans are made only on adequate collateral, such as gold, silver, and government and non-government securities, which are easily negotiable, stable in price, and liquid. The bank took the entire loan amount. 
d. Call loan:
                A call loan is usually a short-term loan. Call loans are given for a few days or weeks. In call loans, the higher interest rates change.

2. Secondary function: 
                                       The secondary function is also knowns as the agency function. The commercial bank charges a minimum for undertaking these functions. The secondary functions are as follows;
a. Remittance of Money:
b. Collection and payment of credit instruments:
c. Purchase and sale of securities:
d. Income receiving and payment:

3.  Contingent function: 
                                       Contingent functions are also knowns as utility functions. The contingent functions of commercials banks are as follows:
a. Locker facility:
b. Traveller's cheque:
c. Letter of credit:
d. Dealing in foreign exchange:
e. Collection of statistics:

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