Banking in Bhutan is a fledgling industry that has grown slowly as the country has pursued modernization. Since its establishment in 1982, the Royal Monetary Authority of Bhutan, headquartered in Thimphu, has served as the central bank of Bhutan. The authority is responsible for issuing currency, implementing monetary policy, coordinating financial institution activities, and holding the government’s foreign exchange earnings. Among its initial duties was the administration of financial assistance for rural development, a duty later delegated to the Bhutan Development Finance Corporation when it was founded in 1988.

The Bank of Bhutan, the nation’s commercial bank, was established in 1968 as a joint venture with the Chartered Bank of India, Australia and China, which owned 25 percent of the bank. In 1970 this share was transferred to the State Bank of India. Since its establishment, the Bank of Bhutan’s board of directors has been composed of key officials from the economic ministries and departments and two officials from the Indian banks. The bank was restructured in 1971.