History of Central Bank in the world

One of the oldest banks that performed some of the duties of a central bank was the bank of Sweden that was opened in 1668 with the help from Dutch businessman. This was followed in 1694 by the bank of England, created by a businessman in the city of London at the request of the British government to help pay for a war. The US Federal Reserve was created by the US Congress through the passing of the Glass-Owen Bill, signed by President Woodrow Wilson on 23 December 1913.

Likewise Nepal Rastra Bank is the central bank of Nepal was established in 1956 under the Nepal Rastra Bank Act, 1955 to discharge the central banking responsibilities including guiding the development of the embryonic domestic financial sector. Nepal Rastra Bank is a nonprofit organization fully subscribed by the Government of Nepal. At the time the Nepalese economy was traditional and characterized by duel currency system, low level of infrastructure development and virtual absence of the financial system. The establishment of this bank had coincided with Nepal's First Five Year Plan aimed at the country's socio-economic development. As the country's central bank, it has the sole right to issue currency notes and coins and is responsible to manage the country's foreign exchange reserves.

The bank's other important functions include developing banking and financial system in the country, rendering advice to the government on financial and economic matters, mobilizing capital and managing public debt. The bank also acts as banker to the government besides serving as lender of the last resort. As in various other developing countries, the bank undertakes a number of development functions that are intended to support the country's effort towards accelerated development of the overall economy.

Nepal Rastra Bank is an autonomous and corporate body having perpetual succession. However the Bank's Act states that government's after consultation with the Governor can give such directions to the Bank as may be necessary in the national interest. The Bank has a pivotal role in the country's economic system in which no other organization is likely to substitute it. Nepal Rastra Bank is the highest monetary authority of the country. The Bank's activities on the whole are directed toward the economic upliftment of the country. Thus Nepal Rastra Bank works in close collaboration with government so that the monetary and fiscal policies formulated by the Bank do not contradict with the plans and programs of the government.