EXECUTIVE SUMMARY : Non-performing loans indicate the quality of banks’ asset and plays a vital role in performance of the banking sector as well as in the economy of the country. However, despite the collaborative efforts from the players in banking sector and regulating institutions, NPLs has been one the biggest issues for Nepalese Commercial Banks. Similar is the concern of RBB which was established on 10Magh 2022 B.S under RBB ACT, RBB has been running under Bank and Financial Institute Act (BAFIA) and Company Act 2063 at present, and is licensed by NRB as an 'A' class commercial bank of the   country. It is one the commercial banks with higher level of NPLs. However, it has not been able to control its NPL as it is still not clear about the factors affecting NPLs in Nepalese Commercial Banking sector. Thus, this study has been conducted to examine the factors affecting NPL in Nepalese Commercial Bank with an objective to identify different bank-specific and 
macroeconomic factors affecting NPL of Nepalese Commercial Banks so that we can recommend appropriate strategies to RBB for curbing its NPL.  
    The study empirically examines the effect of bank specific variables and  macroeconomic variables on NPLs on Nepalese Commercial Banks. The bank-specific variables used in this study includes capital adequacy ratio, loan to deposit ratio, return on assets, loan growth and net interest margin while, macroeconomic variables includes GDP growth, inflation and real interest rate. This study thus 
examines the impact of these variables on NPLs of Nepalese Commercial Banks. The study used secondary data to fulfill its objectives. The balanced panel data of 10 commercial banks from the periods of 2065 to 2077 was to investigate the the relationship between variables. SPSS and Gretl were used to analyze the collected data. Descriptive and inferential statistics which included correlation and econometric models such as Pooled OLS model , Fixed Effect Model and Random Effect model was used to identify the impact of independent variables on dependent variable i.e. NPL. Hausman test was conducted to test the superior model for the study and FEM (one-way) was found to be the most superior model. 
    The empirical results obtained from the superior model reveals that CAR, LTD ratio and RIR has significant impact on NPL while bank-specific variables (ROA, NIM, loan growth) and macroeconomic variables (GDP growth and inflation) have no significant impact on NPL. The result also shows that there exists no long-run equilibrium relationship between macroeconomic variables used in the study and NPL. The findings suggests that RBB and other commercial banks operating in Nepal in order to reduce their NPL must avoid aggressive lending and must focus on quality of the lending through proper monitoring and evaluation of profile of the borrowers. Similarly, when interest rates are cheap bank must be able to filter its customers and  provide loan to the customers who have enough capacity to pay it back because cheap interest rate might attract those customers as well who don’t have enough repaying capacity. Thus, in this case selection and filtering of the customer plays a crucial role in control of NPL. 
 
ACKNOWLEDGEMENT 
Firstly, I would like to extend our sincere gratitude to our college Kathmandu University School of Management (KUSOM). I am much grateful to my supervisor Mr. Dipendra Karki for guiding me in every step. By doing this research I have gained knowledge about different aspects of Nepalese banking Industry. I also got an opportunity to enhance my knowledge regarding the various topics in the course.