NRB Assistant flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

NRB establishment year

Nepal Rastra Bank was established on 14 Baisakh 2013 BS (26 April 1956) under the Nepal Rastra Bank Act 1955, and began central banking operations in 1956.

NRB headquarters

The head office of Nepal Rastra Bank is located at Baluwatar, Kathmandu, where the Governor and central policy departments are based.

Nepal currency peg

The Nepalese Rupee is pegged to the Indian Rupee at NPR 1.6 = INR 1, a fixed exchange rate regime maintained since 1993 to stabilise trade and prices.

Nepal provinces and districts

Nepal is a federal republic with 7 provinces and 77 districts; the Constitution of Nepal was promulgated on 20 September 2015 (3 Ashoj 2072 BS).

NRB Act 2058

The Nepal Rastra Bank Act, 2058 (2002) is the current legal basis of the central bank, setting objectives of price stability, balance of payments stability, and financial stability.

Nepal WTO accession

Nepal became a member of the World Trade Organization in April 2004; it has been an IMF member since 1961 and is also a member of ADB and SAARC.

NRB Governor term

The Governor of Nepal Rastra Bank is appointed by the Government of Nepal for a five-year term and chairs the Board of Directors that governs the Bank.

BAFIA 2073 classes

The Banks and Financial Institutions Act 2073 (2017) classifies BFIs into Class A commercial banks, Class B development banks, Class C finance companies, and Class D microfinance institutions.

Class A paid-up capital

Commercial banks (Class A) in Nepal must maintain minimum paid-up capital of NPR 20 billion, as set by Nepal Rastra Bank under the capital enhancement schedule.

Basel III CRAR requirement

Nepal Rastra Bank requires BFIs to maintain total capital to risk-weighted assets (CRAR) of at least 11%, with Tier 1 at 8.5% and CET1 at 6%.

Capital conservation buffer

Under Basel III as applied in Nepal, BFIs must hold a capital conservation buffer of 2.5% of risk-weighted assets above the minimum CRAR, restricting distributions when breached.

Deposit insurance limit

The Deposit and Credit Guarantee Fund insures deposits up to NPR 500,000 per depositor per institution, protecting small savers if a bank or financial institution fails.

Loan classification categories

Nepali BFIs classify loans as Pass, Watchlist, Substandard, Doubtful, and Bad (loss), with provisioning rates rising from 1.25% for Pass to 100% for Bad.

Single obligor limit

NRB caps exposure to a single borrower or group at 25% of core capital for fund-based facilities and 50% for total facilities, with some infrastructure exceptions.

NCHL payment systems

Nepal Clearing House Ltd operates NCHL-ECC for cheque clearing, NCHL-IPS for interbank payments, and connectIPS for retail online payments; NRB operates RTGS.

Priority sector lending

NRB requires commercial banks to lend a minimum share of total loans to priority sectors such as agriculture, energy, tourism, and MSMEs, with penalties for shortfalls.

Money supply M1 and M2

M1 equals currency in circulation plus demand deposits; M2 (broad money) equals M1 plus time deposits, and NRB targets broad money growth consistent with nominal GDP.

Quantity theory of money

MV = PT states that money supply times velocity equals price level times transactions; inflation roughly equals money growth minus real output growth plus velocity change.

NRB policy rate corridor

NRB uses the repo rate as its policy rate, with the standing deposit facility as the floor and the standing liquidity facility as the ceiling of the interest rate corridor.

Monetary policy instruments

NRB's instruments include open market operations (repo, reverse repo, outright securities trades), cash reserve ratio, statutory liquidity ratio, bank rate, and moral suasion.

Nepal CPI compiler

The Consumer Price Index for Nepal is compiled by the National Statistics Office, with the revised series using base year 2014/15; it measures urban consumer inflation.

GDP deflator formula

The GDP deflator equals nominal GDP divided by real GDP, multiplied by 100; it measures the overall price level change across all domestically produced goods.

Nepal fiscal year

Nepal's fiscal year runs from Shrawan 1 (mid-July) to Asar end (mid-July of the following year); the annual budget is usually presented in Jestha.

Remittances in Nepal

Remittances are Nepal's largest source of foreign exchange, contributing roughly a quarter of GDP and supporting the current account and household consumption.

Accounting equation

Assets equal Liabilities plus Equity; every transaction preserves this balance under double-entry bookkeeping, where total debits equal total credits.

Double-entry debit rules

Debits increase assets and expenses; credits increase liabilities, equity, and revenue. Each transaction records equal debit and credit amounts across accounts.

Cost of goods sold

COGS equals opening stock plus purchases minus closing stock; gross profit equals sales minus COGS, and net profit equals gross profit minus operating expenses.

Straight-line depreciation

Straight-line depreciation equals cost minus residual value, divided by useful life; the reducing balance method applies a fixed rate to the book value each year.

Accrual concept

Under accrual accounting, revenue is recognised when earned and expenses when incurred, regardless of when cash is received or paid; this differs from cash accounting.

Simple and compound interest

Simple interest equals P × R × T / 100; compound interest uses A = P(1 + R/100)^T, with CI = A − P, and half-yearly compounding uses R/2 and 2T.

Mean median mode

The arithmetic mean is the sum of values divided by n; the median is the middle value of ordered data; the mode is the most frequently occurring value.

Standard deviation and CV

Standard deviation is the square root of the average squared deviation from the mean; the coefficient of variation equals SD divided by mean, times 100, comparing relative dispersion.