Nepal Rastra Bank (NRB) — Central Bank

Category

Central Bank (NRB)

Details

Nepal Rastra Bank (NRB)

Nepal Rastra Bank is Nepal's central bank, established on April 26, 1956, under the Nepal Rastra Bank Act. It plays a crucial role in maintaining financial stability and regulating the Nepalese financial system.

Functions of NRB

Note issuing authority: NRB is the sole authority for issuing currency (Nepalese Rupee, NPR) in Nepal.
Banker to the Government: It manages the government's accounts, acts as an advisor, and handles public debt.
Banker's bank: NRB provides credit to commercial banks and acts as the lender of last resort.
Monetary policy: It formulates and implements monetary policy to control money supply, manage inflation, and ensure price stability.
Foreign exchange management: NRB manages the country's foreign exchange reserves and supervises foreign exchange transactions.
Financial regulation: It licenses, regulates, and supervises banks and financial institutions (BFIs) to ensure the stability and health of the financial sector.

NRB Headquarters

Baluwatar, Kathmandu.

Nepal Rupee Peg

Nepal's currency, the Nepalese Rupee (NPR), is pegged to the Indian Rupee (INR).
The official exchange rate is 1 INR = 1.60 NPR.
This peg significantly influences Nepal's monetary policy decisions and trade relations.

Classification of Banks

NRB classifies banks and financial institutions into four categories based on their nature of operations and capital requirements:

Class A: Commercial Banks
Class B: Development Banks
Class C: Finance Companies
Class D: Microfinance Institutions