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Nepal Bank, RBB, ADBL vs Private Banks: Capital Buffer Analysis 2082
In mid-July 2025, Nepal Bank, RBB, and ADBL collectively maintain a stable CAR of 12.70%, but their capital buffers remain modest compared to private-sector peers. Private banks not only dominate in absolute capital volume but also include leaders like Standard Chartered, Prabhu, NIMB, and NIC Asia with significantly higher CARs. However, private banks also carry greater lending risks due to high CD ratios. Overall, state banks continue to provide systemic stability through conservative practices, while private banks drive growth with stronger—but uneven—capital positions.
Sandeep Chaudhary
2 min read
The financial indicators published by Nepal Rastra Bank for Asadh end 2082 (Mid-July 2025) show how the capital buffers of Nepal’s three state-owned commercial banks—Nepal Bank Limited (NBL), Rastriya Banijya Bank (RBB), and Agriculture Development Bank Limited (ADBL)—compare with their private-sector counterparts. Together, the three state banks hold Rs. 87.35 billion in core capital and Rs. 106.17 billion in total capital fund, with an average Capital Adequacy Ratio (CAR) of 12.70% and Core Capital Adequacy Ratio (CCAR) of 10.45%. This means they are comfortably above the regulatory minimum, but the buffer they maintain is relatively modest compared to the strongest private banks. Among them, ADBL (13.36% CAR) stands slightly stronger, while Nepal Bank (13.06%) and RBB (11.84%) maintain thinner cushions.
On the other hand, the private commercial banks collectively dominate the sector in both size and capital strength. They hold over Rs. 512.65 billion in core capital and Rs. 658.5 billion in total capital fund, almost six times larger than the three state banks combined. Their aggregate CAR of 12.80% and CCAR of 9.96% closely matches the state banks in ratio terms, but the absolute volume of their capital provides greater resilience. Several private banks demonstrate far stronger solvency positions than their state-owned peers—Standard Chartered Bank Nepal (CAR 17.82%), Prabhu Bank (13.90%), Nepal Investment Mega Bank (13.73%), and NIC Asia Bank (13.42%) are notable leaders. However, not all private banks enjoy this strength; some, such as Himalayan Bank (11.16%) and Prime Commercial Bank (11.74%), operate close to the regulatory threshold.
The comparison also highlights strategic differences in liquidity management. RBB, for instance, maintains a conservative Credit-to-Deposit (CD) ratio of just 62.27%, showing lower lending risk. By contrast, several private banks such as Citizens (84.45%) and NMB (84.31%) are far more aggressive in credit expansion, putting more pressure on their capital buffers despite stronger CARs. This underlines how private banks, while better capitalized in many cases, also take higher risks that could expose them to shocks if non-performing loans rise further.
Written by
Sandeep Chaudhary