FIM-01-Nepalese Financial System - Copy

7/31/2019 FIM-01-Nepalese Financial System - Copy

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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 subsystems of:


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Financial System

Is a complex but well integrated set of sub

systems of:

Financial Institutions

Markets

Instruments &

Services


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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.


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It can be looked at from :

Regulated by Regulators

Regulated by itself


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Regulated by regulators

There are three regulators in the Nepalese

Financial System. They are:

Nepal Rastra Bank

Securities Board

Insurance Board


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Regulated by itself

There are two financial institutions regulated

by itself. They are:

Employee Provident Fund and

Citizen Investment Trust


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Financial SystemRegulators

Nepal Rastra

Bank

Securities Exchange

Board

Insurance

Board

Independently

Regulated


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Nepal Rastra

Bank

Commercial Banks

Class A Category

Development Banks

Class B Category

Finance CompaniesClass C Category

Micro Credit InstitutionsClass D Category

Co-operatives NGOes


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Securities ExchangeBoard

Nepal Stock Exchange

(NEPSE)


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Insurance Board

Life Insurance Non Life Insurance


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Regulated By

Itself

Employee Provident

Fund

Citizen Investment

Trust


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Nepalese Financial System(As of Paush 2067)

Category Numbers

Commercial Banks 31

Development Banks 83

Finance Companies 79

Micro Credit Dev. Banks 19

Co-operatives 16

NGOes 45

Stock Exchange 1

Life Insurance Companies 4

Non Life Insurance Companies 17


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Number of Banks & Financial Institutions

1980 1985 1990 1995 2000 2005 2006 2011

ComBanks 2 3 5 10 13 17 18 31

Dev

Banks 2 2 2 3 7 26 30 83

Finance

Cos. 45 60 70 79

MFDB 7 11 11 19

Co-

operatves 19 20 19 16

NGOes 47 47 45


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Capital Required for New Banks & Financial Institutions

Rs in Crores

Class National Regional 4 to 10 1 to 3

Level Level Districts Districts

A 200 ------ ------ ------

B 64 ------ 20 10

C 20 ------ ------ 10

D 10 6 2 1


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

Rs in Billions

Institutions Deposits Paid Up Capital

NoShare

%Amount Share

%Amoun

tShare

%

Commercial Banks 30 14 631.28 80 18.73 37

Development Banks 83 39 77.50 10 14.36 28

Finance Companies 79 37 76.86 10 16.84 33

Micro Credit DevBanks 19 10 3.49 0 1.12 2

TOTAL 211 100 789.13 100.0 51.05 100.0


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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

FIM-01-Nepalese Financial System - Copy

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