Which bank is called lender of last resort ?

The bank that is called the lender of last resort is the Central Bank of a country. In Nepal, the Nepal Rastra Bank (NRB) acts as the lender of last resort. This means that when commercial banks face a temporary shortage of funds and are unable to meet their obligations, they can borrow from the central bank to maintain liquidity and stability in the financial system. The central bank provides these loans at a higher interest rate (usually the repo rate) to discourage excessive borrowing and ensure financial discipline. This role helps prevent bank failures and maintains confidence in the banking system.