Chapter 18 · Part 18 — A–Z Glossary

A–Z Glossary

Seventy abbreviations, the standards reference, and the Nepal-only terms.

49 of 51 · 13 min

Every abbreviation used in a Nepali commercial bank's financial statements, alphabetically, with the Part where it is explained in full.

A

Abbreviation	Full form	Meaning	Part
AGM	Annual General Meeting	Shareholders' meeting that adopts the accounts and approves dividends. AGM approval — not board proposal — creates the dividend liability	12.13
ALCO	Asset and Liability Committee	Senior management committee managing interest-rate risk, liquidity, funding and pricing. Its decisions are what Part 6's ratios measure	12.24
AML/CFT	Anti-Money Laundering / Combating the Financing of Terrorism	Customer due diligence, transaction monitoring and suspicious-activity reporting. At NMB the most frequently meeting board committee (7×)	12.20
AOA	Articles of Association	The company's internal constitution; source of the director meeting-fee rates	12.11
AT1	Additional Tier 1	Perpetual, non-cumulative, discretionary-distribution capital. Counts in Tier 1 but not in CET1. NMB's PNCPS = NPR 3bn = ~0.91pp of Tier 1	8.H.14, 12.19

B

Abbreviation	Full form	Meaning	Part
BAFIA	Bank and Financial Institutions Act, 2006	The banking statute — creates the A/B/C/D class structure, capital and reserve requirements, and connected-lending restrictions	12.3
B/FIs	Banks and Financial Institutions	Collective term for NRB-licensed institutions of all four classes	1.6, 12.4
BS	Bikram Sambat	The Nepali calendar. FY runs Shrawan 1 → Asar end (≈ mid-July to mid-July)	5.12

C

Abbreviation	Full form	Meaning	Part
CAR	Capital Adequacy Ratio	Regulatory capital ÷ RWA. Family name for the CET1, Tier 1 and total capital ratios — always specify which	6.1, 6.17
CASA	Current Account and Savings Account	The cheap, sticky portion of deposits. The main driver of cost of funds. Not published — compute it from the deposit note	1.21, 17.6
CCF	Credit Conversion Factor	The proportion of an undrawn commitment expected to be drawn before default; used in EAD	8.D.11
CD Ratio	Credit to Deposit Ratio	Loans ÷ deposits, monthly average, capped by NRB [R]. Measures growth headroom	6.6
CDD	Customer Due Diligence	The KYC process at customer onboarding	12.20
CEO	Chief Executive Officer	Signs the personal responsibility statement in the SEBON disclosure section	12.9, 10.9
CET1	Common Equity Tier 1	The purest loss-absorbing capital: ordinary equity and reserves less goodwill, DTA and other deductions [R]. The number that matters most	6.10
CRR	Cash Reserve Ratio	The minimum balance a BFI must hold at NRB, computed on deposits [R]. Grows mechanically with the deposit base	1.2
CSR	Corporate Social Responsibility	Mandatory profit appropriation and spending obligation [R]. Two-stage: appropriate, then spend	7.5

D

Abbreviation	Full form	Meaning	Part
D&A	Depreciation and Amortisation	Non-cash allocation of asset cost. Includes ROU asset depreciation; excludes goodwill	2.16
DFI	Development Finance Institution	e.g. FMO, IFC. Long-tenor, purpose-earmarked lenders. NMB's borrowings are largely DFI money	1.22, 11.10
DTA	Deferred Tax Asset	Future tax relief from deductible temporary differences. Blocked from distribution AND deducted from CET1 [R]	1.15
DTL	Deferred Tax Liability	Future tax payable. Recognised in full — no probability test	1.25

E

Abbreviation	Full form	Meaning	Part
EAD	Exposure at Default	Expected balance at default, including expected drawdown of undrawn limits. Usually exceeds the current balance	8.D.11
ECL	Expected Credit Loss	NFRS 9 forward-looking impairment: PD × LGD × EAD × DF, probability-weighted	8.D.1
EDD	Enhanced Due Diligence	Heightened AML checks for higher-risk customers and PEPs	12.20
EIR	Effective Interest Rate	The rate that discounts an instrument's cash flows to its carrying amount — including fees integral to the yield. Not the coupon rate	8.E.4
EPS	Earnings Per Share	Profit to ordinary holders ÷ weighted average ordinary shares. Deduct the PNCPS dividend; restate for bonus issues	3.15
ESOP	Employee Stock Option Plan	Uncommon in Nepal — which is why diluted EPS = basic EPS	5.23, 8.H.13
ExCo	Executive Committee	The Key Management Personnel group under NAS 24	10.9

F

Abbreviation	Full form	Meaning	Part
FATF	Financial Action Task Force	Global AML/CFT standard-setter. Nepal's grey listing threatens correspondent banking — and hence remittance and LC income [R]	12.21
FMO	Netherlands Development Finance Company	Dutch DFI, a strategic shareholder with a board seat at NMB	10.1, 12.14
FVOCI	Fair Value through Other Comprehensive Income	Measurement category. FVOCI-equity gains are NEVER recycled to profit — even on sale	3.4, 8.C.1
FVTPL	Fair Value through Profit or Loss	Fair value with all changes to P&L. Transaction costs expensed; no ECL	8.C.5
FY	Fiscal Year	Nepali FY: Shrawan 1 → Asar end. FY2082/83 ≈ July 2025 → July 2026	5.12

G

Abbreviation	Full form	Meaning	Part
GDP	Gross Domestic Product	Macroeconomic input to forward-looking ECL. Remittances are a large share of Nepal's	8.D.2

I

Abbreviation	Full form	Meaning	Part
IAS	International Accounting Standards	The international predecessors of NAS. NAS 12 ≈ IAS 12	8.A.2
ICAN	Institute of Chartered Accountants of Nepal	Pronounces NFRS/NAS, issues carve-outs, regulates auditors. An IFRS answer is not automatically the Nepali answer	12.6
IFRS	International Financial Reporting Standards	The international standards NFRS converges with — but not identically	8.A.1
IRD	Inland Revenue Department	Nepal's tax authority	1.9, 12.11
IRR	Internal Rate of Return	The mathematical basis of the EIR calculation	8.E.4

K

Abbreviation	Full form	Meaning	Part
Kitta	(Nepali — "piece/unit")	A share or security unit. 30,000,000 Kitta @ NPR 100 = NPR 3 billion	8.H.15
KMP	Key Management Personnel	Those with authority to plan, direct and control — the Executive Committee. NAS 24 disclosure	10.9
KYC	Know Your Customer	Customer identification and verification	12.20

L

Abbreviation	Full form	Meaning	Part
Laghubitta Bittiya Sanstha	(Nepali)	Microfinance institution — Class "D"	12.5
LC	Letter of Credit	Trade-finance instrument. Off balance sheet, but generates fee income, RWA and ECL	8.E.17, 8.H.18
LCY	Local Currency	Nepali rupee. The Cost of Funds ratio is LCY-only	6.5
LGD	Loss Given Default	Loss rate after recoveries, discounted for enforcement delay — often the dominant driver in Nepal	8.D.10

M

Abbreviation	Full form	Meaning	Part
M&A	Merger and Acquisition	NRB's consolidation drive under the Merger and Acquisition Bylaws 2073 — the source of goodwill on Nepali bank balance sheets	11.7, 1.14
Mio.	Million	! The segment note uses NPR Mio. while the rest of the report uses NPR '000	9.0
MSME	Micro, Small and Medium Enterprise	A reporting segment. At NMB, the only segment that shrank on every measure	9.3

N

Abbreviation	Full form	Meaning	Part
NAS	Nepal Accounting Standards	Converged with IAS. NAS 1, 7, 8, 10, 12, 16, 19, 21, 24, 27, 28, 32, 33, 34, 37, 38, 40	8.A.2
NASB	Nepal Accounting Standards Board	Develops and publishes NFRS/NAS; ICAN pronounces them	12.7
NBA	Non-Banking Asset	Foreclosed land and buildings. Held as investment property at fair value, not depreciated, provisioned by NRB [R]. A rise is a credit warning	8.F.11, 1.12
NCI	Non-Controlling Interest	The minority's share of a partly-owned subsidiary. Exclude from EPS and ROE	1.35
NED	Non-Executive Director	Must chair the Audit, Risk and HR committees	10.4, 12.22
NEPSE	Nepal Stock Exchange Limited	The only exchange in Nepal. Thin trading (NMB: 64 days) shapes fair value classification and PE reliability	12.12
NFRS	Nepal Financial Reporting Standards	Converged with IFRS but modified by ICAN carve-outs. NFRS 3, 5, 9, 10, 15, 16	8.A.1
NII	Net Interest Income	Interest income − interest expense. ~72% of a Nepali commercial bank's operating income	2.3
NIM	Net Interest Margin	NII ÷ average interest-earning assets. NIM ≠ interest spread — NIM captures free funding	17.3
NLA	Net Liquid Assets	The numerator of the published Liquidity Ratio [R]. Read it with deposit concentration	6.16
NPA	Non-Performing Assets	Same as NPL. NMB uses both terms in the same report	12.18
NPL	Non-Performing Loan	Substandard + Doubtful + Loss. Watchlist is NOT NPL	6.2
NPR	Nepalese Rupee	Functional and presentation currency. ! Figures in '000 except the segment note	8.A.11
NRB	Nepal Rastra Bank	Central bank, supervisor — and author of the accounting overlay (higher-of ECL, regulatory reserve, distributable profit)	12.1

O

Abbreviation	Full form	Meaning	Part
OCI	Other Comprehensive Income	Gains and losses kept out of profit. Never affects EPS — NMB's swung NPR 937m negative with zero EPS impact	3.2

P

Abbreviation	Full form	Meaning	Part
PAT	Profit After Tax	Profit for the period	2.24
P/B	Price to Book	Market price ÷ net worth per share. Often more informative than PE for banks	6.13, 17.8
PBT	Profit Before Tax	Ties to the segment note total	2.20
PD	Probability of Default	12-month for Stage 1; lifetime for Stages 2 and 3	8.D.9
PE	Price to Earnings	Price ÷ annualised EPS. ! NMB's published PE uses standalone EPS	6.13
PEP	Politically Exposed Person	Higher-risk customer category requiring enhanced due diligence	12.20
PF	Provident Fund	Defined contribution plan — pay it and the obligation ends. No actuary, no OCI	8.G.11
PNCPS	Perpetual Non-Cumulative Preference Shares	NMB's NPR 3bn 8.25% AT1 instrument. Every feature engineered to be equity under NAS 32 and AT1 under NRB	8.H.13, 1.30
PPE	Property, Plant and Equipment	Cost model, straight line, land not depreciated. Includes ROU lease assets	1.13, 8.F.1
PV	Present Value	Discounted value. Underlies EIR, ECL recoveries, actuarial valuations and lease liabilities	8.E.24

R

Abbreviation	Full form	Meaning	Part
ROA	Return on Assets	Profit ÷ average total assets. Immune to leverage — the purer measure	6.12
ROE	Return on Equity	Profit (less PNCPS dividend) ÷ average ordinary equity. Rewards leverage — always decompose	6.11
ROU	Right-of-Use	The NFRS 16 lease asset, sitting inside Property and equipment	8.H.3
RTS	Registrar to the Securities	Debenture register services. NMB pays its own subsidiary NPR 450k	10.18
RWA	Risk Weighted Assets	Credit + Operational + Market RWA. Each exposure scaled by a prescribed risk weight [R]	6.1, 12.19

S

Abbreviation	Full form	Meaning	Part
SEBON	Securities Board of Nepal	Capital market regulator. Licenses merchant bankers and brokers; sets listed-issuer disclosure	12.8
SICR	Significant Increase in Credit Risk	The Stage 1 → Stage 2 trigger. Based on the change in risk, with a 30-days-past-due backstop	8.D.8
SLF	Standing Liquidity Facility	NRB's short-term collateralised lending window. A period-end balance can signal a liquidity shortfall	1.19
SLR	Statutory Liquidity Ratio	Minimum holding of prescribed liquid assets [R]. A component of the base rate formula	6.7
SME	Small and Medium Enterprise	A reporting segment; a policy priority; and where credit stress concentrates	9.3
SoCE	Statement of Changes in Equity	The grid that explains what happened to the profit	Part 5
SoFP	Statement of Financial Position	The formal NFRS name for the balance sheet	8.C.8
SPPI	Solely Payments of Principal and Interest	The NFRS 9 cash-flow characteristics test. "Does it behave like a normal loan?" Fail it and fair value is compulsory	8.C.7
STR	Suspicious Transaction Report	AML report to the Financial Information Unit	12.20

T

Abbreviation	Full form	Meaning	Part
TCI	Total Comprehensive Income	Profit + OCI. NMB's grew 19% while profit grew 40%	3.13
TDS	Tax Deducted at Source	Withholding on interest, dividends and salaries, remitted to the IRD [R]	1.9, 4.5
Tier 1	—	CET1 + AT1. Going-concern capital — absorbs losses while the bank operates	6.9
Tier 2	—	Supplementary capital: qualifying debentures, general provision within a cap [R]. Gone-concern capital. Amortises out before maturity	12.19
TTR	Threshold Transaction Report	AML report for transactions above a prescribed threshold [R]	12.20

V

Abbreviation	Full form	Meaning	Part
VRS	Voluntary Retirement Scheme	A termination-benefit event. NMB's produced a NPR 204.5m credit to personnel expenses, making staff costs look flat when they rose ~7%	8.G.8, 2.14

Y

Abbreviation	Full form	Meaning	Part
YTD	Year to Date	Cumulative from Shrawan 1. The basis for performance analysis — "This Quarter" is for momentum only	Index

Standards quick reference

NFRS (converged with IFRS)

Standard	Title	Where it bites in a bank	Part
NFRS 2	Share-based Payment	Nil in Nepal — hence no EPS dilution	5.23
NFRS 3	Business Combinations	Acquisition method, goodwill, bargain purchase gain. ICAN carve-out history	8.B.1
NFRS 5	Non-Current Assets Held for Sale & Discontinued Operations	Scope boundary with NAS 40 for NBAs	8.F.12
NFRS 9	Financial Instruments	The dominant standard — classification, measurement, ECL	8.C.1, 8.D
NFRS 10	Consolidated Financial Statements	Control test; every Group-vs-Bank difference	8.A.8
NFRS 13	Fair Value Measurement	The three-level hierarchy	8.C.10
NFRS 15	Revenue from Contracts with Customers	Fee income — point in time or over time? Excludes interest	8.E.2
NFRS 16	Leases	All leases on balance sheet; breaks pre/post comparability	8.H.2

NAS (converged with IAS)

Standard	Title	Where it bites in a bank	Part
NAS 1	Presentation of Financial Statements	Materiality, aggregation, OCI categories, owner-transaction separation	8.A.6
NAS 7	Statement of Cash Flows	Direct method; the FX reconciling line; non-cash exclusions	Part 4
NAS 8	Accounting Policies, Changes in Estimates and Errors	Retrospective restatement vs prospective estimate change	5.13
NAS 10	Events after the Reporting Period	Adjusting vs non-adjusting. A proposed dividend is non-adjusting	11.5
NAS 12	Income Taxes	Deferred tax; tax follows the item it relates to	8.H.7
NAS 16	Property, Plant and Equipment	Cost model vs revaluation model	8.F.1
NAS 19	Employee Benefits	Four categories, three different P&L/OCI destinations	8.G.1
NAS 21	Effects of Changes in Foreign Exchange Rates	Transaction vs translation differences	8.B.5
NAS 24	Related Party Disclosures	Who is related; KMP compensation; promoter lending	10.1
NAS 27	Separate Financial Statements	Investment in subsidiaries at cost	1.10
NAS 28	Investments in Associates	Equity method	1.11
NAS 32	Financial Instruments: Presentation	Debt vs equity — the PNCPS test. Offsetting	8.H.12
NAS 33	Earnings per Share	Weighted average shares; bonus restatement; PNCPS deduction	8.H.22
NAS 34	Interim Financial Reporting	Condensed, YTD, unaudited	8.A.3
NAS 37	Provisions, Contingent Liabilities and Contingent Assets	The three-part test; deliberate asymmetry for assets	8.H.18
NAS 38	Intangible Assets	Software, 5-year amortisation	8.F.2
NAS 40	Investment Property	The NBA treatment — fair value, no depreciation	8.F.13

Nepal-specific terms you will not find in an IFRS glossary

┌──────────────────────────────────────────────────────────────────────┐
│  Kitta                    A share or security unit                   │
│  Laghubitta Bittiya       Microfinance institution (Class "D")       │
│    Sanstha                                                           │
│  Non-Banking Asset        Foreclosed land/building held by a bank    │
│  Regulatory reserve       NRB's block on distributing non-cash profit│
│  Distributable profit     The NRB statement bridging accounting      │
│    statement              profit to what may legally be paid out     │
│  Deprived sector         NRB-mandated priority lending category [R]   │
│  Base rate                NRB's mandated lending-rate floor formula  │
│  CD ratio                 NRB's capped loan-to-deposit measure       │
│  Exchange equalisation    Appropriation of unrealised FX gains       │
│    reserve / Exchange                                                │
│    Fluctuation Fund                                                  │
│  Capital (Debenture)      Appropriation to fund debenture repayment  │
│    Redemption Reserve                                                │
│  Promoter shareholder     Founder shares with transfer restrictions  │
│  Watchlist                NRB's early-warning grade — NOT NPL        │
│  Carve-out                An ICAN-permitted departure from IFRS      │
│  Old term loan            Loans booked ≤ Asar end 2083, remaining    │
│                           on Gross Interest Rate rather than EIR     │
│  Higher-of rule           Impairment = MAX(NFRS 9 ECL, NRB provision)│
└──────────────────────────────────────────────────────────────────────┘

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