Nepali cinema, whilst not as established as Indian cinema, is hugely influenced by Bollywood Films so that Nepali films often use Bollywood-style songs and narrative. This has earned the Nepali film industry the name Kollywood, after the capital and centre of the Nepali-language film industry: Kathmandu.
Disambiguation with Kollywood
Tamil Cinema is referred as Kollywood, and Nepali cinema primarily being based on Kathmandu is often called with the same name. Hence there exists an identity debate between two schools of thoughts primarily in Nepal. Tamil Cinema is comparatively very large than Nepali Cinema and it doesn't affect it that much. But the feeling of threat has been started in Nepali Cinema and some minority group has already started to advocate that Kollywood isn't Nepali Cinema Industry.
Nepal’s Kollywood film industry (confusingly India’s Tamil-language film industry, based in Chennai, is also often called Kollywood) is relatively undeveloped and relies heavily on talent and resources from Bollywood. The first known film to be made in the Nepali language was DB Pariyar’s Satya Harishchandra in 1951. However it was produced in India and released in Calcutta. Nonetheless the Nepali film industry has produced several films over the last 50 years, many of which cast a critical eye on the upheavals which have beset the country over the last few decades and which offer an insightful glimpse into the culture of this remote Himalayan country. 
21st Century Kollywood fIms
In January 2012, a film named Loot was released and emerged as a blockbuster. It broke most of the commercial records that were held by the movies before it and turned into a phenomenon among the youth of the country. The film 'Kohinoor' emerges as a highest grossing Nepali film which is released on 8 August, 2014. 'Kohinoor' is directed by Aakash Adhikari. 
Further development of nepali films cinematography was showcased in the 2014 film, 'Hostel' directed by Hemraj BC. This film represents the modern youth. It is full of the second generation actors in Nepali movie industry
"STOP Calling "Nepali Film Industry" as "Kollywood" [Accessed 08 December 2014] "Cinema of Nepal" [Accessed 08 December 2014]