History of Banking Sector

  • The development of the banking system is found in ancient times.·
  • In his book ‘Money Credit and Commerce’, Marshall states that in Assyria in the 7th century BC, credit was in vogue. Similarly Phoenicia. Chaldea and banking systems were prevalent in Egypt.·
  • The development of the banking system in Babylon dates back to around 600 BC and bank currency was also in vogue.
  • The development of the institutional banking system took place after the establishment of the Bank of Venice in Italy in 1157 AD, which was considered the first bank.
  • Similarly, Bank of Barcelona 1401 AD·
  •  Bank of Genoa 1407 AD·
  •  Bank of Amsterdam 1609 AD·
  •  German bank of hamburger 1619 AD·
  • Bank of England 1694 Ad ·
  • Bank of united states 1791 AD·
  • The history of the gradual development of the banking system is found to have begun after the Bank of England passed the Bank Act in 1833 AD.

Development of banking sector in Nepal

  • Before the development of the modern banking system in Nepal, the traditional banking system was in vogue.·
  • In 723 AD, King Gunakamdev restored Kathmandu with a loan, which can be seen as a banking system.·
  • During the Jayasthiti Malla period, out of 64 castes, tankdhari were recognized for dealing in money. Who used to provide commercial, family, international, and wartime loans.·
  • In B.S. 1933, Rana Prime Minister ranodip singh developed Tejarath Adda as a government financial institution. Who provided loans at an interest rate of 5 percent.· After increasing commercial needs, Tejarath Adda could not meet the demand and Sahu Mahajan’s influence increased.· Along with Sahu Mahajan, deshi bankers have also developed.·
  • The modern banking system in Nepal was started in 1994 BS after the establishment of Nepal Bank Limited.·
  • Nepal Rastra Bank is the central bank of Nepal. It was established under Nepal Rastra Bank Act 2012 on 2013 Baisakh 14 BS. It first started the issuance of Nepali currency on fagun 7, 2016 BS. Prior to this, Sadar Mulukikhana had brought Rs. 1, 5, 10, and 100 notes currency from on asoj 1, 2002.·
  • Nepal Non-Industrial Development CorporationThe Non-Industrial Development Center, established in 2013 BS, was transformed into the Nepal Non-Industrial Development Corporation in 2016 BS with the objective of providing adequate capital to the industries for the development of the industry.·
  • The Agriculture Development Bank was established on magh 7, 2024 BS. This bank was established at that time by a special act called Agriculture Development Act 2024. The cooperative banks established on bhadra 8, 2020 were also merged on the same date.·
  • Rastriya Banijya Bank was established on magh 10, 2022 BS under Rastriya Banijya Bank act 2021.·
  • According to the policy of attracting capital and foreign investment, by the Government of Nepal, banks were established with the joint investment of Nepali and foreign countries. In this context, the first Nepal Arab Bank Limited (now Nabil Bank Ltd) was established on 29th asar, 2041 BS. Then in the year 2042 BS, Nepal Indosways Bank was established. Thus, various banks including Greenledge Bank, Nepal SBI Bank, and Himalayan Bank have been established.·
  • At present, at end of Magh 2077, there is a total of 142 banks and financial institutions have been established including 27 commercial banks, 19 development banks, 20 financial institutions and 76 microfinance institutions.·(source nrb)  ·

Leave a Comment

Your email address will not be published.