Week 3: My career Industry

Being a finance student and having a management background, I have always aimed of being an entrepreneur or be a financial analyst else work in a financial services industry. As banking or financial institution sector is regarded as one the reputed sector and comprise of most of the financial studies, I want to pursue my career in banking sector.  With the thought of pursuing career in this sector, I did intern in Central Bank of Nepal which helped me to know more about the banking market. Likewise, financial services market in Nepal is increasing everyday and there are many opportunities in this market so career in this industry would be a best choice.

There are several categories of financial service providers active in formal and informal sectors in Nepal. Apart from the commercial banks, the financial system has outgrown to including development banks, microfinance development banks, finance companies, nongovernment micro-credit institutions, and non-government cooperative societies. Likewise there are many financial consultant firms operating in the market.

The initiation of formal banking system in Nepal commenced with the establishment of Nepal Bank Limited (NBL) in 1937, the first Nepalese commercial bank. The country's central Bank, Nepal Rastra Bank (NRB) was established in 1956. A decade after the establishment of NRB, Rastriya Banijya Bank (RBB), a commercial bank under the ownership of the Government of Nepal was established.  After declaring free economy and privatization policy, the government of Nepal encouraged the foreign banks for joint venture in Nepal and for the first foreign joint venture bank was set up as Nepal Arab Bank Ltd (now called as NABIL Bank Ltd). Following this, two foreign joint venture banks, Nepal Indosuez Bank Ltd (now called as Nepal Investment Bank) and Nepal Grindlays Bank Ltd (now called as Standard Chartered Bank Nepal Ltd.) was established. The banks

Today there are 32 commercial banks, 89 development banks, 76 finance companies, 22 micro finance development banks, 16 cooperatives and 37 nongovernmental cooperatives societies. This is one of the biggest industries in Nepal and comprise of US$ 15.2 billion. Two public banks, Nepal Bank and Rastriya Banijya Bank still dominate the market with a combined market share of 32.95 percent in deposits and 31.92 percent in loans. These two combined with the third largest commercial bank, Himalayan Bank with a 9.74 deposit market share and a 9.44 credit market share constitute almost half of the banking sector. In aggregate, the three largest banks possess 50.36 percent of total assets of all commercial banks.

The Banking sector of Nepal is facing its ultimate test amidst political instability, liquidity crisis, and unfavorable policies of the regulating body, sluggish economy and various other macro and micro economic factors. By strengthening the regulatory/supervisory system and improving the implementation of new standards on quality and quantity of capital and liquidity and risk management, opportunities can be created for the banking sector such as branch outreach to rural areas, developing hydro power and tourism etc. Though there are a lot of challenges in the banking sector, many opportunities still exist which are yet to be exploited to their potential for the benefit of the Nepalis.