Development banks are established to develop agriculture, industries and infrastructure and employment opportunities to some extent. In case of Nepalese economy, development banks are providing their services in the following sectors.
A) The fundamental objective of agricultural t bank development is to provide financial support to needy farmers for the modernization and commercialization in agriculture. However, recently this bank has started to provide its service to commercial services. This bank provide loan at subsidized int est. rate than other commercial banks. Agricultural development bank in Nepal was established in 2024BS. At present, some of its branches provides commercial services in the city area as well.
B) Industrial development bank
The bank, which is established to accelerate and promoter the process of industrial in the country, is defined as industrial bank. Industrial bank provides short term, medium term and long term loan for the purchase of fixed assets and variable factor of production. It stands as the backbone of industrial sector to expand and modernize the small, medium and large industries of agricultural, transport, communication, education.
It is also known as investment bank. There are two industrial banks in Nepal.
C) Rural development banks
The concept of rural development banks was development in Bangladesh in 1976AD. It provides banking services banking services to the poor people of rural areas. It also mobilizes small savings, provides credits to marginal farmers or people of suffered classes without tangible deposit.
Generally, it provides short term credits in income generating activities. Rural development bank in Nepal was introduced in 2049BS.There are five regional rural development banks in Nepal.