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iv. Commercial banks issue various credit instruments like cheque, bank draft, traveller’s
cheque, credit cards, letter of credit etc. that assure fast and safe remittance of money
and personal expenses in a reliable manner.
v. Banks provide a number of agency services to their clients/customers, like receipt of
income and payment of expenses, etc.
vi. Banks provide financial, technical and administrative assistance to the persons and
institutions for the development of agricultural, industrial and commercial sectors.
vii. Banks take responsibilities for underwriting i.e. buying and selling the shares,
debentures and other securities issued by the government or public limited
companies.
viii. Banks grant loan to persons and organizations against the security of shares,
debentures, gold, silver and other fixed properties.
ix. Banks provide necessary data, statistics and other economic information to the
government on monetary and fiscal matters for the formulation of a sound monetary
and fiscal policy.
x. Directly and indirectly bank provides employment opportunities in a country.
xi. The bank issues coins, paper notes and credit card which help for exchanging goods
and services which makes easier for measuring the value of goods and services.

6. Types of Banks in Nepal
The banks may be categorised into various types according to their functional area,
rights and authorities. In Nepal, the banks are generally divided into the following category:
1. Central Bank 2. Commercial Bank
3. Development Bank 4. Micro-finance Bittya Sanstha Ltd.
Central Bank

7. Introduction
Central bank is the bank of a country which
occupies central position in the monetary and
banking sectors of a country. It is fully owned and
managed by government. So, the central bank is
known as the government’s bank. The central bank
formulates the monetary and fiscal policy and
solely regulates the entire banking sector by issuing
notes and determining their values with the foreign
currencies, managing cash and credit policy to
strengthen national economy. Thus, the central bank Nepal Rastra Bank
may be defined as that bank, which holds the topmost
position in the banking sectors and solely exercises the rights of issuing notes, managing
cash and credit system, controlling foreign exchange and formulating banking policy for
the development of banking sectors in the interest and welfare of the public. It is always
aimed towards strengthening the national economy by making economic infrastructure
in the country. There is just a single central bank in a country. Nepal Rastra Bank is the

64 Aakar’s Office Practice and Accountancy - 10 Financial Institutions 65