This study is aimed at assessing the impact of regulatory and supervisory functions ofrnNBE on the activities of Ethiopian private banking industry. The research examined thernrole played by the regulatory authorities towards a healthy supervision of the operationrnof banks in Ethiopia and also examined the tools, scope, methods and policy frameworkrnof supervision. The study theme was guided by six specific objectives and three researchrnquestions. The research borrowed heavily from related research material which wasrnappropriately referenced. It adopted a questionnaire based method of evaluation for thernpurposively selected private banks namely (.4wash, Dashen, Abyssinia, Wegagen, United,rnNib International Bank) and for banking supervision department employees of NBE andrninterview with the banking supervision department employees of NBE were conducted tornmeet the specific objective and to answer the research questions and comparing thernsurvey result using descriptive statistics and analysis both results i. e. survey andrninterview with concurrent mixed method research approach. The results of this combinedrnresearch methodology reveal that the supervisory and regulatory framework of NBE isrneffective. But the success of supervisory and regulatory framework of NBE endangeredrnby NBE supervisory capacity particularly related to little experience of the bankingrnsupervision department employees and the absence of entry training for the newrnemployees to notify about the banking operation. The effective regulation and supervisionrnactivities of NBE, results banking stability in Ethiopia. The stability of banking industryrnin Ethiopia measured by using three parameters namely profitability, liquidity and assetrnquality of the banks. Based on this their profitability, liquidity and asset quality of most ofrnprivate banks in Ethiopia is currently increase time to time. As a result, banking industryrnin Ethiopia assure public confidence to deposit and withdraw their money at any time.rnGenerally NBE followed preventive regulation method and on-site and off-siternsupervision method for banks and it has great impact on the activities of bankingrnindustry.