Udaya Raj Adhikari's Blog

1.       Financial Institution =A financial institution established under the prevailing laws with the objectives of providing loans for agricultural cooperative, industrial or any other specific economic purpose or of collecting deposits from the general public . 2.       Money = It means all types of currency notes, postal orders, postal notes, money orders, cheques, drafts, traveller’s cheques, letters of credit, bills of exchange, promissory notes and credit cards and this expression also includes similar types of monetary 3.       Currency Note = It means the bank note in circulation in the form of cash and this expression also includes coin . 4.       Foreign Currency = It means the currency other than the Nepalese currency and this expression includes the special drawing rights on the International Monetary Fund, the Asian Currency Units, the European Currency Units and other instruments as the Central Bank may prescribe. 5.        Foreign Exchange = It means foreign cur

                                                             1. Historical Background Central banking is a recent phenomenon mainly related to 19 th and 20 th centuries, although certain central banking functions were performed by certain institutions in the olden days. The growth of central banks has been very slow. The Riks Bank of Sweden is the earliest bank established in 1656. The bank of England, though founded in 1694, started functioning as the central bank with the passing of the Bank Charter Act, 1882. Other major countries which established central banks in the 19 th century are France (1800), Netherlands (1814), Russia (1860), Germany (1875), Japan (1882), etc. The movement of central banking started in the 20 th century, particularly after the International Financial Conference meeting at Brussels in 1920 which suggested the opening of central banks in all countries. It gained the momentum after the establishment of International Monetary Fund in 1947. The Federal Rese