The This paper examines the effect of credit risk on the performance of sample from ten different development banks in Nepal using yearly data over the period of 2014/15 AD. to 2018/19 A.D. The empirical study is done through Regression model and Correlation Analysis to examine the effect on performance of Development Banks in Nepal. The result of the study reveals that there is a negative correlation between Capital Adequacy Ratio (CAR) and Cash Reserve Ratio (CRR), with Return on Assets (ROA) whereas there is weak positive correlation between Non-Performing Loan Ratio (NPLR) and Total Operating Expenses to Total Assets Ratio (TOTA), with Return on Assets (ROA). From the regression analysis, it can be concluded that Capital Adequacy Ratio (CAR), Non-Performing Loan Ratio (NPLR) and Total Operating Expenses to Total Assets Ratio (TOTA) are insignificant variable. However, the Capital Adequacy Ratio (CAR) was found to be significant with the Return on Assets (ROA). Key-words: Return on Assets, Cash Reserve Ratio, Capital Adequacy Ratio, Non-Performing Loan Ratio, Total Operation to Total Assets, Banking