1.1 Background of the study Economy of the country is the backbone of the nation.

The well economic

condition of the country gives identity to the country itself and to the people of the county. Economy
and commerce are interrelated to each other. Sound economy promotes commercial factor and well
commerce gives sound economic condition. Nepal’s economy highly depends upon agriculture. Most of
the people are dependent upon traditional agriculture. Today, Nepal is stepping into the commercial
sector. Nepal’s liberalisation endeavour and economic reform process has a political history. People’s
movement against then Panchayat regime, which resulted in poor economic performance, led to
continued deterioration in the country’s balance of payments position in the early 1980’s. As a result,
Nepal earmarked upon a path of economic reforms. The initiation of the reform process was marked by
the implementation of the International Monetary Fund sponsored Structural Adjustment Programme in
1984 followed by similar other programmes like Structural Adjustment Facility and Enhanced Structural
Adjustment Facility in years to come. Government with the view of accelerate the pace of economic
development under the structural adjustment program undertook a significant step towards financial
liberalization in the year 2043/44. The liberalization policy of the government of Nepal has encouraged
the private sectors to invest in various fields, which supports the domestic overall economic growth. The
government of Nepal introduced financial sector reforms in 1980s, which encouraged the healthy
competition in the financial sector as well as allowed the entry of