The central bank of Nepal is called Nepal Rastra Bank (NRB). It regulates the country's financial system and monetary policy by supervising banks, managing currency supply, and setting key policy interest rates. As the bank of banks, NRB was established in 2012 and is an autonomous body that serves as the government's chief adviser on financial and economic matters like fiscal policy and foreign exchange rates. Its objectives include maintaining price stability and sustainable economic development.

1. Central Bank?

2.  Apex Bank/ Supreme Bank
 National Bank
 Bank of Banks
 Regulates financial sector
 Supervises the activities (External Audit/Internal Audit/System Audit)
 Issues and manages national currency
 Formulates and Implements policies (monetary policies (CRR/Open
market operation), Foreign reserve policy, Foreign exchange rate
 Adviser (Country’s debt, Fiscal policy/budget, tax)
 Handles budgetary accounts
 Manages external monetary affairs (Foreign reserve/exchange rate)

3. Establishment of central Bank
• NRB Act 2012
• NRB Establishment 2013
• Separate seal for the transaction of business of the bank
• Autonomous and corporate body with perpetual succession
• Acquire, utilize, retain sell and dispose of or manage movable and
immovable property
• Sue in its name and bank may also be sued in the same name
• Shall be located at Kathmandu and open branches

4. Objective Of the Bank
• Formulate necessary and foreign exchange policies in order to
maintain the stability of price ,balance of payment, sustainable
development of economy and mange it.
• Promote stability and liquidity
• Develop as secure, healthy and efficient system of payment
• Regulate, inspect, supervise and monitor the banking and financial
system
• Promote entire banking and financial system to enhance its public
credibility

5. Functions Duties and Power of Bank
• To issue bank Notes
• To formulate necessary monetary policies (CCD/CD/ Capital expenditure)
• To formulate foreign exchange policy (Peg/ Floating)
• To determine the system of foreign exchange rate
• To manage and operate foreign exchange reserve
• To issue license (regulate, inspect, supervise, and monitor)
• To act as banker, advisor and financial agent of government
• To act as banker, of commercial banks and financial institutions, to function as
lender of the last resort

6. Conti….
• To establish and promote the system of payment , clearing and
settlement and to regulate these activities
• To implement or cause to implement any necessary functions

7. Functions not to be carried out by Nepal
Rastra Bank
• Providing any loan, accepting any type of deposits and making any
type of financial gift
• Purchasing shares of any commercial bank, financial institution, public
corporation, commercial, agricultural, industrial or other institutions.
• Carrying out any type of business.
• Acquiring right over movable or immovable assets

8. However..

9. Composition of BOD in Nepal Rastra Bank
• Governer – Chairman
• Secretary, Minister of Finance-Member
• Two Deputy Governors- Member
• Three Directors appointed by the government (renowned in the fields
of economics, monitory, banking, finance and commercial law –
Member

11. Governor Appointment
• From council of ministers of Nepal
• Committee is established for appointment
Finance Minster
One person, from Ex-Governers
One person, renowned in the fields of economics, monitory, banking,
finance and commercial law

12. Recommendation for governor is made from
• Deputy Governer
• Renowned in the fields of economics, monitory, banking, finance and
commercial law
• Name list of 3 person

13. Qualification for Governer, Deputy Governor
and Director

15. Functions and Legal power of Nepal Rastra
Bank
• Issue of Paper Money and Coins
• Banker to Government
• Agent to the Government
• Adviser to the government
• Custodian of the bank
• Custodian of foreign currency
• Lender of the last resort
• Credit Control(CCD/CD/ Capital Expenditure/ Investment plan/
priority

16. Conti….
• Control and supervision of financial institutions
• Transfer of fund
• Clearing house function
• Publication of economic and statistical information( periodic review,
macro economic data)
• Promotional and development functions
• Miscellaneous Functions
Maintaining relation with International monetary fund, World Bank
and Asian Development bank

17. NRB Relationship with Government and
Other Agencies
• Coordination with Public bodies
Can make necessary coordination to achieve its objectives
(For example NEA, Akhitiyar Durupayog, CIB, NCHL, Nepal oil
corporation )
May provide necessary information to government on the balance of
payment, banking and financial matters (changes in policy for trade)
Government of Nepal, public bodies and private sectors shall , in the
event of request made by bank , provide information on economic
and financial matters

18. • International Cooperation and Relationship
Bank shall represent the kingdom of Nepal in international organization
The bank may provide the services of banking and payment to foreign
government foreign central bank etc.
The bank shall take part in international organization working for the
financial and economic stability through international monitory
cooperation.(IMF, BIS)
While taking part in international organization, bank shall assume the
responsibility and undertake the functions to be carried out on behalf of
the country.