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financial institutions, working as the last lender of the banks, publishing monetary
position of the company, conduct central clearance of the bank and financial companies
through the adjustment of their accounts, work as the last lender and gives necessary
information to the government about the monetary position of the country and so on.

Points to Remember

i. Issue of notes ii. Working as the government’s bank
iii. Working as the banker of other banks iv. To create and control of credit
v. Management of foreign currency vi. Developing banking system
vii. Mobilization of capital and management of public debt viii. Makes monetary policies
ix. Lender of last resort x. Other functions

Commercial Bank

9. Introduction
Generally, the word bank refers to the
commercial bank. The concept of bank was evolved
from the development of commercial activities.
A commercial bank refers to that bank which
accepts deposits of the public and organizations,
grants loan to them against securities providing
financial and technical assistance to the traders and
commercial parties and rendering agency services
to the clients/customers as requested. Nepal Bank
Ltd. was established as the first commercial bank Rastriya Banijya Bank
and the first bank of Nepal in 1994. B.S. Then Rastriya Banijya Bank was established in
2022 B.S. under Rastriya Banijya Bank Act, 2021. Again Agriculture Development Bank,
which was established in 2024, has also been allowed to serve commercial functions from
2041 B.S. Other commercial banks established in Nepal are Himalayan Bank Ltd., Nabil
Bank Ltd., Mega Bank Ltd., Agricultural Development Bank Ltd., Standard Chartered
Bank Ltd., etc. As per the NRB requirement, commercial banks need to meet revised
paid-up capital requirement of Rs. eight billion (8,000,000,000). This type of commercial
bank is categorized as ‘A’ class financial institution (bank) of Nepal.
According to the dictionary of Banking and Finance, “Bank which offers banking service to
public is commercial bank”.
According to Bank and Financial Institution ACT 2063 BS., “A bank is an organized
institution established to perform financial transactions.”
According to Jeannie Adams, “A business that receives deposits from and provides loans to
customers.”
According to M.L. Seth, “A bank is an institution which deals in money and credit.”

68 Aakar’s Office Practice and Accountancy - 10 Financial Institutions 69