Development Banks

Development banks are a category of financial institutions that operate under the supervision of Nepal Rastra Bank (NRB) — the central bank — and are regulated by the Bank and Financial Institutions Act (BAFIA) . Their primary role is to support and promote economic development, especially in rural and semi-urban areas, by providing medium- and long-term credit for productive sectors.

A development bank is a type of financial institution that provides long-term capital for economic development projects, especially in industries, infrastructure, agriculture, and small and medium enterprises (SMEs). Unlike commercial banks, development banks are not primarily focused on short-term profits or consumer banking but instead aim to foster economic growth and reduce regional disparities.

In Nepal, development banks are licensed by Nepal Rastra Bank (NRB)—the central bank—and categorized as Class 'B' financial institutions. They operate under the Bank and Financial Institutions Act (BAFIA) and are allowed to carry out banking activities such as:

• Accepting deposits
• Providing loans (especially long-term and project financing)
• Investing in productive sectors

Roles of Development Banks in Nepal:

• Financing agriculture and rural development
• Supporting small-scale industries and entrepreneurs
• Promoting financial inclusion in remote areas
• Helping generate employment and reduce poverty

Types of Development Banks in Nepal:

Nepal has two main categories of development banks:

1. National Level Development Banks
   • Operate across the whole country.
2. Regional or Local Level Development Banks
   • Operate in specific regions or districts.

List of Development Banks in Nepal: