Nepal Banking Job Preparation 2083: Complete Beginner Guide (Part 1)

Banking Taiyari Series, Part 1 of 5

Let me guess. You have a bank vacancy form open in one tab, a YouTube lecture in another, and a notebook full of half-understood words like CRR, SLR and NPA. You are not alone. Every year thousands of young Nepalis prepare for bank jobs, and most of them make the same mistake: they memorize answers without understanding the system underneath.

This series fixes that. In five posts, I will take you from "what even is a bank?" to "I can answer any interview question calmly." No heavy textbook language. Just simple explanations, local examples, and the reasoning behind every term. This is Part 1, the foundation. Build it well and everything else becomes easy.

What Is a Bank? The Dhukuti Story

Forget the glass buildings for a moment. Think about a dhukuti in your neighborhood. Ten families put in Rs 5,000 every month. Each month, one family takes the full pot. Everyone gets a lump sum at some point, and the group handles the trust.

Now imagine that dhukuti grows to millions of families, becomes professional, follows government rules, and also lends money to businesses. That is a bank.

A bank does three basic jobs:

Takes deposits: It keeps your money safe and pays you interest.
Gives loans: It lends that money to people and businesses and charges higher interest.
Provides services: Payments, remittance, cards, mobile banking, guarantees and more.

The difference between the interest the bank earns on loans and the interest it pays on deposits is called the spread. This spread is the heart of the bank's income. Remember this word. Interviewers love asking, "How does a bank make money?" and the honest first answer is the spread, followed by fees and commissions.

Why Do Banks Exist at All?

Imagine a farmer in Chitwan with extra savings and a shopkeeper in Pokhara who needs money to expand. They will never meet. A bank sits in the middle and connects them safely. In technical language, this is called financial intermediation. Banks move money from people who have it to people who need it, and they take on the risk of repayment in between.

Banks also make daily life smoother. Salaries arrive in accounts. Remittance from Qatar reaches a village in Gulmi. Traders pay suppliers without carrying cash. A country without good banks would be like a city without roads.

Nepal Rastra Bank: The Big Brother of All Banks

Every bank in Nepal answers to one authority: Nepal Rastra Bank (NRB), the central bank. It was established in 2013 BS (1956 AD). If banks are players, NRB is the referee, the rule-maker and the emergency doctor at the same time.

Here is what NRB does. Learn these as a list, because "functions of a central bank" is a classic question:

Issues currency: Only NRB prints Nepali notes.
Makes monetary policy: It controls how much money moves in the economy, to keep prices stable.
Banker to the government: The government keeps its accounts with NRB.
Banker to banks: Commercial banks keep reserves with NRB.
Regulates and supervises: It gives licenses, checks books and punishes violations.
Manages foreign exchange reserves: This protects the country when it pays for imports.
Lender of last resort: If a bank faces a cash crisis, NRB can step in.

Simple trick to remember: NRB = Notes, Rules, Banker, Reserves. If you remember those four words, you can rebuild the whole list in an interview.

One more fact worth knowing: the Nepali rupee is pegged to the Indian rupee at a fixed rate of 1 Indian rupee = 1.60 Nepali rupees. Interviewers often ask why, and the short answer is the deep trade and open border relationship with India.

Classes of Banks and Financial Institutions in Nepal

NRB divides licensed institutions into four classes. Think of them as four school grades, with different capital strength and different permission to operate:

Class	Type	Main Role
A	Commercial Banks	Full banking: deposits, big loans, foreign exchange, trade finance
B	Development Banks	Development and regional lending, project finance
C	Finance Companies	Limited services, mostly small deposits and loans
D	Microfinance Institutions	Small loans to low-income groups, especially women and rural families

Over the last few years, many banks have merged to become stronger, so the number of commercial banks has gone down to around twenty. Always check the latest NRB list before your exam, because this number changes. Capital requirements for each class also get updated, so verify the current figures on the NRB website rather than trusting old notes.

A bit of history helps in interviews. Nepal Bank Limited started in 1994 BS (1937 AD) as the first commercial bank. Rastriya Banijya Bank followed in 2022 BS (1966 AD). Then the private sector entered after economic liberalization, and joint venture and private banks multiplied. Knowing these two names and dates will make you look well prepared.

Types of Bank Accounts (And Why They Exist)

Bank accounts are not just boxes for money. Each type solves a different problem:

Savings account: For everyday people. You can deposit and withdraw, and you earn interest.
Current account: For businesses that make many transactions a day. Usually no interest, but no limit on withdrawals.
Fixed deposit (FD): You lock money for a fixed period and get higher interest. Banks love FDs because they are stable funds.
Call deposit: A flexible, short-term account with interest that depends on the balance.

Here is a term you must know: CASA. It stands for Current Account and Savings Account. These deposits are cheaper for the bank because the interest paid is low. A bank with a high CASA ratio has lower funding cost and usually earns better profit. This one term can lift your interview answer from average to impressive.

How Banks Give Loans: The Basics

When you apply for a loan, the bank is really asking one question: "Will this person pay me back?" Everything else is a way to answer that. Bankers check what they call the 5 Cs of credit:

Character: Is the borrower honest and reliable?
Capacity: Does income cover the repayment?
Capital: How much of their own money is in the project?
Collateral: What security is offered, such as land or a building?
Conditions: What is the market situation for this business?

Common loan types in Nepal include home loans, vehicle loans, education loans, business or working capital loans, term loans, overdraft facilities and agriculture loans. Banks also must direct a portion of lending to priority areas such as agriculture, energy and tourism. This is called priority sector lending, and NRB sets the targets.

What Is NPA?

When a borrower stops paying, the loan turns bad. A loan with overdue payments is called a non-performing asset (NPA), or non-performing loan. Under NRB rules, loans are classified as pass, watchlist, substandard, doubtful and loss depending on how long they are overdue. For each class, the bank must set aside money as loan loss provision. Higher NPA means lower profit and weaker trust, which is why bankers treat recovery very seriously.

Five Terms That Show Up in Every Exam

We will go deeper in Part 2, but start getting comfortable with these:

CRR (Cash Reserve Ratio): The share of deposits banks must keep with NRB as cash. It controls how much money banks can lend.
SLR (Statutory Liquidity Ratio): The share of deposits kept in liquid assets like cash, government bonds and similar securities, for safety.
Bank rate: The rate at which NRB lends to banks.
Interest rate corridor: A band set by NRB to keep short-term market rates stable.
CD ratio (Credit to Deposit ratio): How much of deposits has been given as loans. Too high means liquidity pressure. Too low means the bank is not using its money well.

Note: The exact CRR, SLR and CD ratio limits change with each year's monetary policy, so always confirm the current numbers from NRB's latest policy document before your exam.

Modern Banking in Nepal: Cards, Apps and Payments

Nepali banking has changed quickly. Mobile banking, QR payments, ATMs, internet banking and wallets are now normal. Interbank payment systems such as connectIPS and Fonepay QR have made transfers instant for many people. For a modern banker, digital literacy is no longer optional. In your interview, be ready to explain how a QR payment moves money from one bank to another, and what security risks (phishing, OTP fraud, SIM swap) customers should watch for.

Key Institutions Around Banking

Credit Information Bureau (CIB): Keeps borrower credit history so banks can check past behavior.
Deposit and Credit Guarantee Fund: Protects small depositors up to a limit if a bank fails.
Securities Board of Nepal (SEBON): Regulates the capital market, which banks also interact with through IPOs and share issuance.
Insurance Authority: Regulates insurance companies, closely linked to bancassurance.

Common Beginner Interview Questions (With Smart Answers)

Q1. What is a bank and how does it earn money?
A bank is a licensed institution that accepts deposits and gives loans. It earns mainly from the spread between lending and deposit rates, plus fees, commissions, remittance and foreign exchange income.

Q2. What is the role of NRB?
NRB is the central bank. It issues currency, frames monetary policy, supervises banks, manages foreign reserves, and acts as banker to the government and to banks.

Q3. Why do you want to join a bank?
Do not say "for a secure job." Say you enjoy working with people and numbers, you understand banking builds the economy, and you want to grow through a structured career. Add one real example, like helping family members with financial paperwork.

Q4. What is the difference between savings and current accounts?
Savings is for individuals and pays interest. Current is for businesses with frequent transactions and usually pays no interest.

Q5. What is NPA and why does it matter?
NPA is a loan whose repayment is overdue beyond the limit set by NRB. It matters because it reduces profit, requires provisioning and damages the bank's reputation.

Your 7-Day Starter Plan

Day 1: Read about NRB and write its functions in your own words.
Day 2: Learn the four classes of banks and list two examples of each.
Day 3: Study account types and the CASA concept.
Day 4: Understand the 5 Cs of credit and loan types.
Day 5: Learn NPA and loan classification.
Day 6: Read current monetary policy highlights.
Day 7: Practice answering the five questions above out loud, without notes.

Pro tip: Speak your answers aloud. Reading feels like knowing, but speaking proves it. Interviewers can tell the difference within seconds.

Final Words

Banking is not about memorizing a hundred terms. It is about understanding one simple chain: people deposit money, banks lend it carefully, NRB keeps the system safe, and everyone earns trust. Once that chain is clear in your mind, every new term fits into place like a puzzle piece.

In Part 2, we will decode 50 banking terms in plain language, including CRR, SLR, Basel, CAR, liquidity and more, and explain why banks use each one. Bookmark this blog so you do not miss it.

Your turn: Which banking term confuses you the most? Write it in the comments and I will explain it in the next post.

Frequently Asked Questions

How long does it take to prepare for a bank job in Nepal?
With daily study of one to two hours, most candidates need two to three months to cover basics, policies and interview practice.

Do I need a finance degree to become a banker?
No. Many banks hire graduates from management, economics, science, IT and other fields, though basic banking knowledge is essential.

Which source should I trust for current banking numbers?
Use official NRB publications and your target bank's website. Notes from last year may already be outdated.

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