18. NRB Governors over the years
a) Name of Governor Term of office
b) Mr. Himalaya Shumsher J.B. Rana 26th April 1956 – 7th February 1961
c) Mr. Laxminath Gautam 8th February, l961 – 17th June, l965
d) Mr. Pradyuma Lal Rajbhandari 18th June, l965 – 13th August, l966
e) Dr. Bhekh Bahadur Thapa 14th August, l966 – 26th July, l967
f) Dr. Yadav Prasad Pant 24th April, l968 – 28th April, l973
g) Mr. Kul Shekhar Sharma 29th April, l973 – 12th December, l978
h) Mr. Kalyana Bikram Adhikary 13th June, l979 – 8th December, l984
i) Mr. Ganesh Bahadur Thapa 25th March, l985 – 22nd May, l990
j) Mr. Hari Shankar Tripathi 10th August, l990 – 17th January, l995
k) Mr. Satyendra Pyara Shrestha 18th January, l995 – 17th January 2000
l) Dr. Tilak Bahadur Rawal 18th January 2000 – 17th January 2005
m) Mr. Deependra Purush Dhakal 29th August 2000 – 27th April 2001
n) Mr. Bijaya Nath Bhattarai 31st January 2005 – 30th January 2010
o) Mr. Deependra Bahadur Kshetry 15th January 2009 – 26th July 2009
p) Dr. Yuba Raj Khatiwada 22nd March 2010 – 19th March 2015
q) Dr. Chiranjibi Nepal 19th March 2015 – Present
19. The Government of Nepal shall form, before the dismissal of the Governor, an Investigation Committee, composed of the following persons, and dismiss the Governor on the basis of the recommendation of that Committee:
(a) The person appointed by the Government of Nepal from among the retired judges of the Supreme Court as Chairman of the Board.
b) Two persons designated by the Government of Nepal as economic, monetary, banking, financial, commercial or administrative personnel of good reputation. Sectors as a member of the Board of Directors.
20. The functions, duties, and powers of the Board of Directors are the following:
(a) shape monetary and exchange policy;
b) make the necessary decisions regarding the denomination of banknotes and coins, numbers, size, metal, materials for the printing of banknotes and other materials; and develop appropriate guidelines on its subject;
(c) definition of the necessary measures to encourage supervision and control of commercial banks and financial institutions, as well as banks and financial institutions.
(d) adopt the Rules of Procedure and Rules of Procedure of Nepal Rastra Bank and establish guidelines for the operation and administration of Nepal Rastra Bank;
(e) framework for appointment, promotion, transfer, dismissal, payment, pension, gratuity, pension, license, code of conduct, and other terms of service for employees of Nepal Rastra Bank;
(f) approve the annual programs and budget of the Rastra Nepal Bank and the annual audit, and submit its report to the Government of Nepal for information;
g) approve the annual report on the activities of Nepal Rastra Bank;
(h) establish the necessary principles for the granting of a license to commercial banks and financial institutions and the revocation of said license;
(i) Approve the limitation of the loan to be granted to the Government of Nepal by the Nepal Rastra Bank;
(j) determine the amount, ceiling and terms of the loan and the refinancing granted by NRB to commercial banks and financial institutions;
k) Decide on the membership of Nepal Rastra Bank in international organizations, associations;
l) framework for the mobilization and investment of NRB funds;
(m) Submit a proposal to the Government of Nepal for its reasons, if an amendment to this Act is required;
(n) decide on all other matters, except matters for which the governor is responsible.
(o) delegation to the Board of Directors of the faculties conferred on the Board of Directors or the subcommittee formed by the Board, with or without a time limit.
(p) Present its report and recommendations to the Board of Directors on accounts, budgetary and audit procedures and the control system of Nepal Rastra Bank.
21. The capital of Nepal Rastra Bank is one trillion rupees. The capital of Nepal Rastra Bank is received by the government of Nepal and this capital cannot be transferred or debited.
22. Nepal Rastra Bank prepares a profit and loss account for each year. When preparing the profit and loss account according to the subsection. It is prepared in accordance with international accounting standards.
23. The Board of Directors will approve, before the beginning of each financial year, the estimated budget of income and expenses and the programs for the next financial year. The Board of Directors can evaluate and amend the approved budget every three months on the basis of the actual position and the matters to be estimated. This budget will be sent to the Government of Nepal for information.
24. Nepal Rastra Bank has full authority to formulate, implement and implement Nepal’s monetary policy. Nepal Rastra Bank conducts transactions in the open market on the basis of agreements for the immediate and deferred purchase and sale of debt securities issued on behalf of the Government of Nepal or the Nepal Rastra Bank itself and can be sold immediately on the market. This transaction can also take the form of repurchase agreements or reverse repurchase agreements.
25. NRB will provide commercial banks and financial institutions with instructions to maintain their mandatory reserve with Nepal Rastra Bank in relation to deposits, borrowed funds or other obligations imposed by Nepal Rastra Bank. It is the duty of commercial banks and financial institutions to maintain the mandatory deposit of the Rastra Nepal Bank required by the Nepal Rastra Bank.
26. In cases where a commercial bank or a financial institution does not comply with the mandatory deposit required by the Nepal Rastra Bank, the NRB will impose a fine on a bank or financial institution for the duration of the bankruptcy. During the imposition of the fine, the amount of the fine cannot exceed three times the maximum amount of the bank interest rate imposed by the Nepal Rastra Bank.
27. Nepal Rastra Bank can grant loans and refinances to commercial banks and financial institutions for a maximum period of six months, subject to the conditions established by it, to guarantee the security of:
(a) bail issued by the Government of Nepal to be paid within Nepal;
(b) The accumulated deposits in Nepal Rastra Bank or the gold and precious metals that Nepal Rastra Bank can handle.
(d) The bill or promissory notes.
(e) Other mandatory values.
28. Nepal Rastra Bank determines from time to time the discount rate and the refinancing interest rate. Nepal Rastra Bank publishes and communicates the discount rate and refinancing interest rate information for all involved.
29. NRB has a monopoly on the issuance of notes and coins in Nepal. Such bills and coins are required by law in Nepal. Nepal Rastra Bank will only issue Bonds against guarantee and the liability of said Bonds issued will be equal to the value of the guarantee held as collateral. At least fifty percent of the guarantee that will be maintained is gold, silver, foreign currency, foreign securities, and foreign notes, and the remaining percentage is one or more of the currencies.
30. The valuation of different property in Nepal is as follows:
(a) the price of gold at the rate fixed by the Government of Nepal on the recommendation of the Committee;
(b) the price of silver at the price the Board deems appropriate;
(c) foreign currencies at the exchange rate established by the Nepal Rastra Bank;
(d) debt securities issued by the Government of Nepal, foreign securities and any change in price that Directors deem appropriate based on market prices;
(e) Currencies at nominal value.
31. Nepal Rastra Bank can issue banknotes with different denominations. Although banknotes are issued in this manner, the Government of Nepal approves the banknotes, size, and denominations, and the Board establishes information, internal safeguards, banknotes, and other information.
32. The Government of Nepal may, in consultation with the Board, declare that a banknote of any denomination is no longer considered legal tender in any other place than the specified place or office after a notice has been published in the Gazette of Nepal. Nepal Rastra Bank can not re-issue torn, illegible or heavily soiled notes.
33. The Board shall regulate the nominal value, the measure, the weight, the size and other characteristics of the currencies that Nepal Rastra Bank will issue under this Act. Likewise, matters related to the printing of banknotes and coins, the Obtaining bills and coins not delivered, their correct conservation and the custody or destruction of old bills or coins that are not in circulation will be treated as prescribed.
34. Exchanges of Nepal Rastra Bank in Nepal, free of charge, a banknote or legal tender for notes or coins of the same or different denomination of equal value is determined by NRB itself.
35. NRB carries out tasks related to currencies and currencies and regularly delivers notes or coins to meet the demand for foreign currency.
35. NRAs find it illegal if someone finds them.
(a) falsify or alter banknotes and coins in circulation in Nepal as legal tender or checks or payment cards, or take any other related action or cooperate in such activities;
(b) possess, transport or issue tickets, coins, checks or payment cards knowing that such notes, coins, checks or payment cards have been made, falsified or altered in a false manner, or to assist in any way in such acts;
(c) possession, transportation of plates, stones, papers, stamps or other materials or substances with the guarantee that they intend to falsify, or alter bills or coins, to make checks or payments or to assist in such activities. Nepal Rastra Bank can take appropriate measures to prevent the issuance of counterfeit notes or counterfeit coins or the duplication of checks or payments. Nepal Rastra Bank can issue the orders, instructions or warnings needed during these actions.
If someone is proved with accusing this crime then he will be liable to the punishment defined by Muluki Ain 2075. In this provision There could be imprisonment for the deceased or person according to the sub-section shall be imprisoned for five years and ten years, and from fifty thousand rupees to one lakh rupees. To make sure that someone is making or using any tools or any other equipment, to buy or buy any or her reason for making sure that the money is used or making or making money is used.
36. NRB has full authority to formulate, implement and implement Nepal’s exchange policy. The Nepal Rastra Bank manages the currencies. Nepal Rastra Bank has the following powers for this administration:
(a) grant a license under this Act or other laws applicable to persons who are willing to engage in foreign exchange transactions;
(b) formulate norms and statutes and adopt the instructions, guidelines or circulars necessary to regulate currency trading currency traders;
(c) inspect and monitor the currency trader;
(d) determine the reasons, restrictions, and terms of the currency exchange agent’s transaction;
(e) requires the system to determine the exchange rates of the Nepalese currency.
37. Nepal Rastra Bank quotes in currencies after fixing its purchase and sale prices. The basis, restrictions, and conditions of such trade are those prescribed by the Nepal Rastra Bank.
38. The Nepal Rastra Bank mobilizes the foreign exchange reserve. This reserve is denominated in the respective currency and consists of the following assets:
(a) gold and other precious metals held by or on behalf of Nepal Rastra Bank;
(b) foreign currencies held by or on behalf of Nepal Rastra Bank;
(c) foreign currencies held in the accounts of Nepal Rastra Bank in the books of a foreign central bank or other foreign banks;
(d) Special Drawing Rights (SDR) of Nepal Rastra Bank to the International Monetary Fund;
(e) invoices, promissory notes, certificates of deposit, promissory notes and other debt securities payable in foreign currencies convertible and issued by borrowers or borrowers and maintained by the Nepal Rastra Bank;
(f) Nepal Rastra Bank purchases in the future or repurchase agreements entered into or guaranteed by foreign central banks or public international financial institutions, as well as futures and options contracts of Nepal Rastra Bank that provide for payment in freely convertible foreign currency.
39. NRB may, at its own expense or on behalf of the State and at the request of the Government of Nepal, enter into compensation and payment agreements with foreign public or private central clearing unions. Nepal Rastra Bank can enter into other agreements necessary to achieve the objectives of this agreement.
40. Nepal Rastra Bank is the banker and financial advisor to the Government of Nepal and a financial agent from Nepal. The Government of Nepal consults Nepal Rastra Bank on all matters within its area of responsibility. It is the duty of Nepal Rastra Bank to advise on matters consulted by the Government of Nepal.
The Nepalese government consults Nepal’s Rastra Bank on domestic debt, including the current account overdraft, when preparing its annual budget. Nepal Rastra Bank presents an annual report to the government of Nepal on the review of the economic and financial situation.
41. The Nepalese government can consult Nepal Rastra Bank while receiving loans from outside sectors. The consultation covers topics such as loan amount, loan terms and loan repayment. The Nepalese government must inform Nepal Rastra Bank about obtaining external loans.
42. The government of Nepal consults the Nepal Rastra Bank and authorizes public and private institutions to increase their responsibility for foreign currency credit. The government of Nepal, a public body or the private sector informs Nepal Rastra Bank of the agreements that have established the responsibility for currency exchange.
43. Nepal Rastra Bank accepts deposits from the Nepalese government or other entities required by the government of Nepal. By accepting deposits pursuant to paragraph (1), Nepal Rastra Bank receives and pays funds, maintains accounts and provides related banking services.
44. NRB acts as a fiscal representative of the Government of Nepal in the following matters, subject to the conditions set out in the agreement concluded with the Government of Nepal:
(a) marketing, purchase, and sale of debt securities issued by the Government of Nepal and acting as registration and transfer agents;
(b) Payment of the principal, interest and other charges of the Bonds.
(c) Other functions are necessary to perform as an agent.
45. Nepal Rastra Bank can be consulted on any proposal made by interested entities for legislation related to matters related to or within the scope of Nepal Rastra Bank’s objectives, including monetary policy and its commercial activities, loans and the balance of payments, currencies and banking transactions before they are presented for modification or legislative action.
46. Nepal Rastra Bank has the authority to propose to the Government of Nepal proposals to legislate or amend existing laws on issues related to the objectives of Nepal Rastra Bank or any area of its competence, such as monetary policy and its operation, creation, and control of credit, the balance of payments , currencies and banking.
47. A person, firm, firm or organization authorized to accept deposits or grant credit in accordance with applicable laws shall establish the interest rate of deposits and, from time to time, charge the loans in accordance with the relevant Nepalese agreements. Rastra Bank.
48. Commercial banks and financial institutions have the prescribed license of Nepal Rastra Bank for the settlement of banking and financial transactions. Nepal Rastra Bank can establish the necessary conditions and the authorized bank and the financial institution must comply with these terms.
49. NRB is fully empowered to regulate the functions and activities of commercial banks and financial institutions. For the purposes of the Regulation, Nepal Rastra Bank may establish rules and regulations of the procedure with respect to matters that Nepal Rastra Bank deems appropriate and issue the necessary orders, directives, and circulars. The commercial banks and relevant financial institutions must comply with these rules according to said rules, statutes, regulations, directives and circulars.
50. Nepal Rastra Bank can provide commercial banks with the necessary instructions and information about the books and accounts, the profit and loss account, the transactions and commitments on the balance sheet and off-balance sheet, the statement of income and expenses, and the balance between them. Accounts or articles.
51. Nepal Rastra Bank has the following powers with respect to commercial banks and financial institutions:
(a) to enforce the powers and responsibilities granted under this Act and all other laws related to the licensing, supervision and regulation of commercial banks and financial institutions, as well as the revocation of the license of commercial banks and institutions and the granting or granting of fiduciary rights to commercial banks or authorized financial institutions declared bankrupt or bankrupt;
(b) examine, inspect or supervise by an official of Nepal Rastra Bank or the person designated by Nepal Rastra Bank, the books and accounts, records, documents or records of commercial banks or financial institutions to find out if a commercial bank or a financial institution has made transactions and transactions in accordance with the provisions of this Act or the Rules of Procedure, Articles of Association and an ordinance or directive;
(c) require the member of the board of directors, an official or employee of a commercial bank or a financial institution to provide the necessary information about the bank or the financial institution, if the review and supervision of the transaction of that bank are required or financial institution.
d) NRB may from time to time give commercial banks and financial institutions guidelines on the banking system, currency and credit. If the Commitment of commercial banks and financial institutions have to comply with these guidelines, the commercial bank and the financial institution should provide Nepal Rastra Bank with the details of their transaction and financial condition prescribed by the Nepal Rastra Bank.
The Nepal Rastra Bank can publish the information provided. It promotes the existing bank to establish branches in those areas where there is no banking facility. It performs the function of supervision of other banks and gives directions and helps to the bank for their development. It also helps to develop the banking habit of people to meet the international financial system and circulation of capital.
e) Commercial banks and financial institutions must obtain the prior approval of Nepal Rastra Bank when issuing bonds or financial instruments of any kind. Once approved, Nepal Rastra Bank can impose the necessary conditions and the relevant commercial bank and financial institution are bound to comply with these conditions.
52. A commercial bank or financial institution must notify the bank within fifteen days of the insolvency or liquidation situation under the applicable law or the inability to settle the debt or may not fully liquidate the liabilities of a commercial bank. or financial institution.
53. The Nepal Rastra Bank declares any commercial bank or financial institution problematic if the Bank is satisfied on the basis of the information received or the inspection report that the following conditions apply to any commercial bank or financial institution that supervises or by another means.
(a) in the case of an act contrary to the interests of depositors, shareholders, creditors or the public,
(b) in the case of breach of a financial obligation or breach of that obligation or failure to pay the amount owed;
(c) In the event of bankruptcy or insolvency or in case of significant financial difficulties
(d) in case of misappropriation or breach of this Act, the applicable law related to banks and financial institutions, other applicable laws, licenses or regulatory provisions, directives or banking regulations;
(e) If the license has been obtained on the basis of false, fraudulent or false documents or data,
(f) If the capital fund cannot be maintained under this Act, the laws applicable to banks and financial institutions and the guidelines issued by the Bank shall apply.
(g) in the event of liquidation or insolvency proceedings of a commercial bank or financial institution under applicable law,
h) In the case of an unreasonable delay involuntary liquidation.
(i) For the commercial bank or the financial institution established with the joint business of the foreign commercial bank or the financial institution, while the foreign commercial bank or financial institution is insolvent or the liquidator has been designated for the liquidation or license of that commercial bank or financial institution.
The Institute will be terminated in accordance with the laws of the relevant jurisdiction or the Transaction will be totally or partially prohibited or in the case of the execution of banking transactions with a said commercial bank or financial institution.
(j) If the Bank is convinced that a commercial bank or a financial institution cannot pay its debts or obligations, it may adversely affect its performance.
54. Notwithstanding any provision of the Companies Act or any other applicable law, the Bank may take any or all of the following measures against the commercial bank or financial institution identified as having problems under this provision.
(a) Increase the capital paid when issuing new shares or upon receiving the appropriate amount of the issued capital.
(b) Suspension of voting rights or other rights of the shareholder.
(c) Stop distributing a dividend or any other amount to the shareholders to increase the capital.
(d) establish limits on the number of bonuses, salaries, compensations and other costs for the Director and other principal executives.
(e) provide corporate governance, internal control and risk management of the commercial bank or financial institution.
(f) prohibition or restriction in the collection of deposits, loans or investments.
(g) Maintain sufficient capital and a high proportion of liquidity or prohibition of business or other necessary conditions.
(h) To restrict the transactions of commercial banks or financial institutions or to prohibit the sale of real estate or the expansion of branches, or to close a national or international branch.
(i) Maintain the necessary risk mitigation agreements for those properties that are materially doubtful, or for securities that do not have adequate valuation or other characteristics
(j) prohibit any activity that is illegal, by violating the applicable law and Bank rules, that are contrary to the commercial bank’s interests
or financial institution.
(k) It is prohibited to carry out certain transactions with commercial banks or financial institutions during a specific period of time.
(l) Preliminary approval of the Bank for significant capital expenditures, significant commitments with material liabilities or contingent liabilities.
(m) issue an instruction to remove the position to one or more directors, managers or employees, as necessary.
(o) suspend the Board of the commercial bank or the financial institution and assume the administration of that commercial bank or financial institution on its own or carry out the administration and administration of that commercial bank or financial institution by a designated official.
55. The financial year of Nepal Rastra Bank is the same as the fiscal year of the government of Nepal.
56. Nepal Rastra Bank maintains accounts and records at all times that are capable of reflecting its commercial and financial status in accordance with international accounting standards.
57. NRB will prepare for each financial year an annual report containing the balance sheet, profit, and loss account and related information. Nepal Rastra Bank presents the annual report of the subsection to the Government of Nepal within four months after the end of each financial year.
58. The Auditor General verifies the accounts of Nepal Rastra Bank. The Board of Directors may, if it considers it appropriate, initiate the internal audit of its accounts by an external auditor. While an audit of this type is initiated, it must be carried out in accordance with the accounting practice of international practice.
59. Nepal Rastra Bank must provide the government of Nepal with the following reports within four months after the end of each financial year:
(a) the audit report,
(b) report on their own activities,
c) Report on the economic and financial situation.
60. Nepal Rastra Bank publishes the Monetary Policy Report every year for the benefit of the public. The report that will be published in this way contains the following information:
(a) Comprehensive review and evaluation of the monetary policy introduced and applied by the Nepal Rastra Bank in the previous year.
(b) Justification and analysis of the monetary policy that Nepal Rastra Bank will introduce the following year.
61) The Governor and the Director before the Supreme Judge of the Supreme Court or the judge prescribed by him and the Deputy Governor before the Governor shall take an oath of secrecy and mail before assuming office, as specified in the calendar. Any employee or advisor appointed to the Bank for the first time must maintain the duty of confidentiality before resuming work.
There are further terms and condition inside these duties that NRB perform. You can find them in the Nepal Rastra Bank Act 2058 amended in 2073. Here listed are the common important noteworthy feature, about NRB summarized in 60 points.
Major Functions of Nepal Rastra Bank
Find here the major functions of Nepal Rastra Bank – the central bank of Nepal. As we know that the central bank of Nepal is Nepal Rastra Bank. Today, there is hardly any country, which does not have a central bank. Initially, central banks were privately owned and privately managed joint stock banks.
However, now, particularly after World War II, most of the central banks have been nationalized. In the countries, where such banks are not functioning, governments have established central banks as state-owned institutions. Nepal Rastra Bank is one of the central banks set up in this condition.
The central bank is the supreme financial institution of the country. The government has empowered the central bank by law to regulate, supervise and monitor the banking sector for a better economic environment. It helps the government to control the financial sector through the central bank. A sound and prosperous banking environment can be possible only with the proper functioning of such power.
The discussion of banks and other banking regulators will not be complete without a discussion of the central bank. Like all central banks around the globe, Nepal Rastra bank, probably, has more impact on the day-to-day activities of banks than any other government agencies.
The primary job of a central bank is to carry out a monetary policy which involves making sure that the banking and financial system functions smoothly and the supply of money and credit from that system contributes to the nation’s economic goals.
By controlling the growth of money and credit, the Nepal Rastra Bank tries to ensure that;
- The economic growth is an adequate rate,
- Unemployment is kept as low as possible,
- Inflation is held down and the value of the Nepalese currency is protected.
Nepal Rastra Bank as the central bank of Nepal has the power to regulate, supervise and monitor all the banks of the country. Such power is authorized by the Nepal Rastra Bank Act, 2058.
According to the data recently published by Nepal Rastra Bank, there are 28 commercial banks, 58 development banks and 79 financial companies operating under Nepal Rastra Bank. The increased number of banks indicates the increased responsibility of Nepal Rastra Bank.
Nepal Rastra Bank was established as the nation’s central bank under the Nepal Rastra Bank Act, (2012) on 2013B.S. It is a non-profit organization fully subscribed by the government.
The Major Functions of Nepal Rastra Bank: Central Bank of Nepal are as follows:
- Issue of Nepali currency notes and coins
- Manage foreign exchange and reserve
- Developing banking and financial system in the country
- Rendering advance to the government on financial and economic matters
- Mobilizing capital and managing public debt etc.
- Act as the banker of the banks
- Act as banker to the government
- Lender of the last resort to other banks and government
- Implementation of monitory policy, monetization and accelerating economic development
Nepal Rastra Bank is an autonomous and corporate body having perpetual succession. However, the bank’s act states that The Government of Nepal, after consultation with the governor, can give such directions to the bank as may be necessary for the national interest.
The bank has a key role in the country’s economic system in which no other organization is likely to substitute it. As the highest monetary authority of the country, the bank’s activities are directed towards the economic upliftment of the country.
Thus, Nepal Rastra Bank works as close collaboration with The Government of Nepal so that the monetary and financial policies formulated by the bank do not contradict with the plans and programs of the government.
It is the prime responsibility of Nepal Rastra Bank to safeguard the public deposit into banks. In another hand, smooth and safe operating of commercial banks is also the responsibility of Nepal Rastra Bank. This bank gives direction and regulations to the commercial banks, wherever needed for proper management of the banking sector.
author: – Sudip Babu Dhakal
Major Functions of Nepal Rastra Bank: Central Bank of Nepal
Regular functions of Nepal Rastra Bank: Central Bank of Nepal
Governmental functions of Nepal Rastra Bank: Central Bank of Nepal