An Outlook of financial institutions compared to COVID-19 pandemic

Madan Shrestha

Ex-Deputy Director of ADBL 

                                             A financial institution is a company involved in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange. Effectively everyone living in a developed economy has an ongoing or at least periodic need for the services of financial institutions. In the context of Nepal, the major categories of financial institutions including central banks, commercial banks, development banks, finance companies, microfinance, cooperatives, investment companies, brokerage firms, insurance companies, and mortgage companies are involved in financial activities. 

     Financial institutions that focus on dealing with financial transactions, such as investments, loans, and deposits. Almost everyone has a deal with a financial institution regularly. Everything from depositing money to taking out loans and exchange currencies must be done through financial institutions. Financial institutions are fighting against the Covid-19 pandemic since the seventh month before. Due to the COVID-19 pandemic and resulting lockdown the sector of tourism, industrial sector, manufacturing sector, hydropower sector, education sector, entertainment, media, gyms, temples, monasteries, churches mosques, health clubs, museums, transport, enterprises, and hotel, almost sectors are hit hard, and normal life has been brought to a standstill. 

     The lockdown curfews, self-isolation, social distancing, and quarantine have affected the overall physical, mental, spiritual, and social wellbeing of the Nepalese. From the knowledge of the global scenario and Nepalese context, almost sector is going down due to coronavirus. As the spread of coronavirus has created risks in multiple sectors, the government has come up with some measures to tackle those impacts of COVID-19 on the economy and other areas expecting to keep stability. 

     All the country is in a difficult situation. All the problems that we meet are not created by ourselves. Daily-wage workers are primarily facing two types of problems: first, their income source has stopped with lockdown, and second, they have no stock of daily essentials for the future. In this context, the mobilization of local levels has been looked at to find such community and take measures for preventing them from suffering hunger by ensuring their daily minimum food requirement which is most.

   The economic damage caused by the COVID-19 pandemic is largely driven by a fall in demand, meaning that there are no consumers to buy the goods and services available in the market. The Government of Nepal has kept banks and financial institutions under essential services to be run during the lockdown. It has occurred that the economic growth rate is getting slowdown due to the prevalence of nationwide lockdown enforced to suppress the spread of the COVID-19 pandemic and reduction in production, service sector, and many more.  

   The cumulative impact of a pandemic leads to a disorderly of short-term revenue and expenses in the banking sector. There may be a significant drop in Profit. As the demands of the next coming months will be different from what was predicted by the financial institutions. The bank’s operating model needs to change to meet governance responsibilities such as managing risk, supplying reliable challenge to management, and acting as liable factors of the organization. 

   The COVID-19 induced market environment made negatively affect banks’ credit rating profile or other business risk factors that increased and affected the comfort of banks, counterparties, and borrowers, especially in the high yield grade. Credit expansion is one of the key indicators of how the economy is performing in its business. Banks should remain focused on keeping ongoing operations, given the increased difficulties of going with such operations remotely. During the fifth-month lockdown, around 61 percent of the factories are shutting down completely, according to a central bank (NRB) study. We are losing from almost every sector. The contribution of employees in this pandemic despite being psychologically and physically hit hard is admirable. 

     Almost all segments are negative growth. The world is during a COVID-19 pandemic. Nepal where we are fighting against the COVID-19 pandemic for seventh months earlier. Many countries are supporting their citizens with sophisticated health safety-nets and various relief funds, some developing countries have unique challenges with vulnerable populations and limited resources to respond to a pandemic like Nepal. The economic depressions have put significant financial pressure on many financial institutions.


Financial institutions in Nepal are licensed by Nepal Rasta Bank as of Mid Jul 2020 

1. Commercial Banks (Class ‘A’ Banks)

2. Development Banks (Class ‘B’ Banks)

3. Finance Companies (Class ‘C’ Banks)

4. Micro Credits Development Banks (Class ‘D’ Banks)

1. Commercial Banks (Class ‘A’ Banks) 



1. Agriculture Development Bank Ltd

2. Nepal Bank Ltd. 

3. Rastriya Banijya Bank Ltd. 

4. Nabil Bank Ltd. 

5. Nepal Investment Bank Ltd. 

6. Standard Chartered Bank Nepal Ltd. 

7. Himalayan Bank Ltd

8. Nepal SBI Bank Ltd. 

9. Nepal Bangladesh Bank Ltd. 

10. Everest Bank Ltd. 

11. Bank of Kathmandu Lumbini Ltd. 

12. Nepal Credit and Commerce Bank Ltd. 

13. NIC ASIA Bank Ltd. 

14. Machhapuchhre Bank Ltd. 

15. Kumari Bank Ltd. 

16. Laxmi Bank Ltd. 

17. Siddhartha Bank Ltd

18. Global IME Bank Ltd

19. Citizens Bank International Ltd. 

20. Prime Commercial Bank Ltd. 

21. Sunrise Bank Ltd. 

22. NMB Bank Ltd. 

23. Prabhu Bank Ltd

24. Mega Bank Nepal Ltd. 

25. Civil Bank Ltd

26. Century Commercial Bank Ltd. 

27. Sanima Bank Ltd. 



  2. Development Banks (Class ‘B’ Banks)



1. Narayani Development Bank Ltd.

2. Karnali Development Bank Ltd.

3. Excel Development Bank Ltd

4. Miteri Development Bank Ltd.

5. Muktinath Bikas Bank Ltd.

6. Corporate Development Bank Ltd.

7. Kanchan Development Bank Ltd.

8. Sindhu Bikas Bank Ltd.

9. Sahara Bikas Bank Ltd.

10. Salapa Bikash Bank Ltd.

11. Green Development Bank Ltd.

12. Sangrila Development Bank Ltd.

13. Shine Resunga Development Bank Ltd.

14. Jyoti Bikas Bank Ltd.

15. Garima Bikas Bank Ltd.

16. Mahalaxmi Bikas Bank Ltd.

17. Lumbini Bikas Bank Ltd.

18. Kamana Sewa Bikas Bank Ltd.

19. Saptakoshi Development Bank Ltd.

20. Tinau Mission Bikas Bank Ltd.




3. Finance Companies (Class ‘C’ Banks)



1. Nepal Finance Ltd.

2. Nepal Share Markets and Finance Ltd.

3. Gurkhas Finance Ltd.

4. Goodwill Finance Ltd.

5. Shree Investment & Finance Co. Ltd.

6. Lalitpur Finance Co. Ltd.

7. United Finance Co. Ltd. United

8. Best Finance Ltd.

9. Progressive Finance Co. Ltd.

10. Janaki Finance Co. Ltd.

11. Pokhara Finance Ltd.

12. Central Finance Ltd.

13. Multipurpose Finance Co. Ltd

14. Shrijana Finance Ltd.

15. Samriddhi Finance Co. Ltd.

16. Capital Merchant Banking & Finance Co. Ltd.

17. Crystal Finance Ltd.

18. Guheshwori Merchant Banking & Finance Ltd.

19. ICFC Finance Ltd.



20. City Express Finance Company Ltd.

21. Manjushree Financial Institution Ltd.

22. Reliance Finance Ltd




 4. Micro Credits Development Banks (Class ‘D’ Banks) 



1. Nirdhan Utthan Laghubitta Bittiya Sanstha Limited

2. RMDC Laghubitta Bittiya Sanstha Limited

3. Deprosc Laghubitta Bittiya Sanstha Limited

4. Chhimek Laghubitta Bittiya Sanstha Limited

5. Swabalamban Laghubitta Bittiya Sanstha Limited

6. Sana Kisan Bikas Laghubitta Bittiya Sanstha Limited

7. Nerude Laghubitta Bittiya Sanstha Limited

8. Naya Nepal Laghubitta Bittiya Sanstha Limited

9. Mithila Laghubitta Bittiya Sanstha Ltd.

10. Summit Laghubitta Bittiya Sanstha Ltd.

11. Sworojagar Laghu Bitta Bika Bank Limited

12. First Microfinance Laghubitta Bittiya Sanstha Limited

13. Nagbeli Laghubitta Bittiya Sanstha Limited

14. Kalika Microcredit Development Bank Limited

15. Mirmire Microfinance Development Bank Limited

16. Janautthan SamudayikMicrofinance Dev. Bank Limited

17. Womi Microfinance Bittiya Sanstha Ltd.

18. Laxmi Microfinance Bittiya Sanstha Ltd.

19. Civil laghubitta Bittiya Sanstha

20. Mahila Sahayatra Microfinance Bittiya Sanstha Ltd.

21. Vijaya Laghubitta Bittiya Sanstha Ltd.

22. NMB Microfinance Bittiya Sanstha Ltd

23. FORWARD Community Microfinance Bittiya Sanstha Ltd.

24. Global IME Laghubitta Bittiya Sanstha Limited

25. Mahuli Samudyik Laghubitta Bittiya Sanstha Ltd.

26. Suryodaya Laghubitta Bitiya Sanstha Ltd.

27. Mero Microfinance Bittiya Sanatha Ltd.

28. Samata Microfinance Bittiya Sanatha Ltd.

29. RSDC Laghubitta Bitiya Sanstha Ltd.

30. Samudayik Laghubitta Bitiya Sanstha Ltd.

31. National Microfinance Bittiya Sanstha Ltd.

32. Nepal Sewa Laghubitta Bitiya Sanstha Ltd.¤

33. Unnati Microfinance Bittiya Sanstha Ltd.

34. Swadeshi Lagubitta Bittiya Sanstha Ltd.

35. NADEP Laghubitta Bittiya Sanstha Limited

36. Support Microfinance Bittiya Sanstha imited

37. Arambha Microfinance Bittiya Sanstha Limited

38. Ghodighoda Laghubitta Bittiya Sanstha Limited

39. Asha Laghubitta Bittiya Sanstha Ltd

40. Nepal Agro Microfinance Bittiya Sastha Ltd

41. Gurans Laghubitta Bittiya Sanstha Ltd

42. Ganapati Microfinance Bittiya Sastha Ltd

43. Infinity Microfinance Bittiya Sanstha Ltd

44. Adhikhola Laghubitta Bittiya Sanstha Ltd.

45. SwabhimanMicrofinance Bittiya Sanstha Ltd.

46. Sparsha Laghubitta Bittiya Sanstha Ltd.

47. Sabaiko Laghubitta Bittiya Sanstha Ltd

48. Sadhana Laghubitta Bittiya Sanstha Ltd.

49. NIC Asia Laghubitta Bittiya Sanstha Ltd.

50. Sarathi Laghubitta Bittiya Sanstha Ltd.

51. Manakamana Laghubitta Bittiya Sanstha Ltd.

52. Sajeelo Laghu Bitta Bittiya Sanstha Ltd.

53. Buddha Jyoti Laghubitta Bittiya Sanstha Ltd.

54. Samaj Laghubitta Bittiya Sanstha Ltd.

55. Grameen Swayamsewak Laghubitta Bittiya Sanstha Limited

56. Mahila Laghubitta Bittiya Sanstha Limited

57. Adarsha Laghubitta Bittiya Sanstha Limited

58. Unique Nepal Lagubitta Bittiya Sanstha Ltd.

59. Manushi Laghubitta Bittiya Sanstha Limited

60. Smart Laghubitta Bittiya Sanstha Limited

61. Jalpa Laghubitta Bittiya Sanstha Limited

62. Mahila Samudayik Laghubitta Bittiya Sanstha Limited

63. Rastra Utthan Laghubitta Bittiya Sanstha Limited

64. Solve Laghubitta Bittiya Sanstha Limited

65. WEAN Laghubitta Bittiya Sanstha Limited

66. Upakar Laghubitta Bittiya Sanstha Limited

67. Dhaulagiri Laghubitta Bittiya Sanstha Limited

68. CYC Nepal Laghubitta Bittiya Sanstha Limited

69. NESDO Samriddha Laghubitta Bittiya Sanstha Limited

70. Swastik Laghubitta Bittiya Sanstha Limited

71. Garibi Nyunikaran Laghubitta Bittiya Sanstha Limited

72. Shrijanshil Laghubitta Bittiya Sanstha Limited

73. NRN Laghubitta Bittiya Sanstha Limited

74. Jiban Bikash Laghubitta Bittiya Sanstha Limited

75. Gharelu Laghubitta Bittiya Sanstha Limited

76. Janakpur Laghubitta Bittiya Sanstha Limited

77. BPW Laghubitta Bittiya Sanstha Limited

78. Aatmanirbhar Laghubitta Bittiya Sanstha Limited

79. Shaligram Laghubitta Bittiya Sanstha Limited

80. Super Laghubitta Bittiya Sanstha Limited

81. Abhiyan Laghubitta Bittiya Sanstha Limited

82. Deurali Laghubitta Bittiya Sanstha Limited

83. Nawa Kiran Laghubitta Bittiya Sanstha Limited

84. Khaptad Laghubitta Bittiya Sanstha Limited

85. Grameen Bikas Laghubitta Bittiya Sanstha Ltd.



    The financial institutions have been playing a distinct role in fulfilling the demand of the public. The growth of the financial services sector is highly important for a nation’s economic growth and development. Its importance to economic growth arises from its critical role in empowering financial role. Nowadays, the banking sector acts as the backbone of modern business. Commercial banks are the main pillar for making the economic growth upgrade and enhancement that affects the national economic growth by its services. 

     At present, the impact of COVID-19 banks and financial institutions are in critical condition. Almost financial institutions have loosed their profit /income compared to last year. A public deposit is the main resource. Nepal Rastra Bank has directed the commercial bank to keep the spread rate at a maximum of 4.5 % by the end of the current fiscal year. The spread rate is the difference between the interest rates on deposit & loan. 

   The upper limit for B & C class financial institutions has been set 5%. Development banks & finance companies must reach this limit by the next fiscal year starting. The impact of the COVID-19 market is all most closed. There is no mobility of business. Nobody can run their business without the market economy movement. Due to the blockage of business, people are in hand to mouth problems. Daily life is getting out of order or chain of the cycle. 

   The market economy is in a thoughtful position. There is no demand for loans. Interest is the main resource of income for financial institutions. Those financial institutions who use the maximum resources and deliver massively loan to their customer they can able to earn more profit than others. Due to a lack of disbursing loans, as the resulting income is getting slowdown to the financial institutions. According to NRB more than 3.5 Trillian deposit ending of the year 2076 is in a commercial bank. If the volume of the deposit is going up, normally the cost of funds goes to increase. The graph of financial institutions’ recovery rate is going downward. Almost Bfis, a great challenge to sustain and keep the office as usual position. 

         At present, the resources of income are getting downward, but the expenditure is not constant. So, therefore, it is a great task to the financial institutions to survive in such a market economy. Right now, it is hard to determine at this stage. Financial institutions have significant difficulties and challenges to deliberating services although careful steps must be performed & management must be frequent and expansive. Every decision should be specific, facts, safe and sound leading practices. Every decision should be specific. Thus, the financial institutions should minimize the financial loss by applying the various tools & techniques with expert manpower.


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