EXECUTIVE SUMMARY: Banks  are  very  important  organizations  which  aid  in  the  execution  of  socio-economic  activities undertaken  by  individuals, business  organizations  and even  sovereign  states. They  serve primarily  as  a medium  which  bridges  the  gap  between  surplus  and  deficit  spending  units  in  an  economy.  The traditional role of banks has centered on generation of net interest income through two core activities namely, deposit and loan. But, commercial banks have gradually expanded beyond their traditional roles and sources of income to encompass more activities that generate non-interest income which has become important contributor in the growth of banks revenue. So, this paper studies the impact of non-interest income on the banking performance.
The main objective of this study is to investigate the relationship between selected internal bank variables and banks financial performance measured in terms of return on equity and net profit. It is also to find the dominant variables of commercial bank by considering yearly data from FY 2009/10 to FY 2015/16 of variables namely, LC commission, BG commission, remittance fee, exchange gain/loss, service charge and renewal fee. 
This study is based on secondary data. The annual publication of banks were used for collection of data and for analysis of the data, descriptive statistics such as mean, standard deviation along with regression, correlation coefficient was used to find the results. The study has taken 10 commercial banks as a sample for the study for the period of FY 2009/10 to FY 2015/16. Two methodologies were used in order to determine the relationships between the dependent and independent variable; first, a correlation analysis and second, multivariate regression analysis. 
The data analysis found that independent variables like LC commission, remittance fee, exchange gain/loss and service charge had significant relationship with net profit and renewal fee and BG commission has no significant relationship with net profit. The analysis also shows that the non-interest incomes of the commercial banks is growing yearly and are contributing in the profit of the banks. So, banks need to initiate measures that will increase the non-interest income.

ACKNOWLEDGMENTS
The research entitled “The Impact of non-interest income on financial performance of commercial banks in Nepal” has been prepared under the graduate research project as partial fulfillment of Masters of Business Administration (MBA) under the program of faculty management, Pokhara University. 
I extend my deepest gratitude to our GRP supervisor Mr. Dipendra Karki for his support, encouragement, motivation and help throughout the dissertation work.