In traditional Hindu Newar society, the Srēṣṭha caste ranks second to the priestly Rājopadhyāyā Brāhman in the ritual hierarchy.

[3] In the Malla era, together with the Rājopadhyāyā Brāhman priests, the Sréṣṭhas controlled key posts of the administration and gained vested interest in the land by acquiring feudal rights over holdings.

Similarly, they have historically been strict adherents of the Brahmānic social norms and rituals (like following the custom of Upanayana, performing the Śrāddha ceremony, and being much closer to the mainstream North-Indian Hindu virtues in comparison to other Newars).

However, there are few exceptions to this norm; a few notable families like the Pradhān aristocrats of Bhagavan Bahāl in Thamel and Amatyas of Swatha, Lalitpur.

[8] The former is the specialist of ritual Vedic texts, the guardian of the sacred science, the repository of the knowledge of the dharma, the ultimate authority on religious affairs.

The latter represents the king, the warriors, the military, and administrators, and he has a particular affinity with all matters pertaining to material goods, and economic or political action.

[11] Although to outsiders they remain as a single non-hierarchical group, to Srēṣṭha themselves there are two major divisions within the caste which in theory and till recent times practiced caste-endogamy, non-commensality, dining restrictions, and other caste-status denoting activities between each other.

[7][12] Although researchers have found up to four broad divisions, the two main historically categorized groups of the Srēṣṭha caste are: Chatharīya and Pāñchthariya.

[13] The Chatharīya (छथरिय/क्षत्रिय) (also referred to as Chatharī or Chatharé) are regarded as the Newar aristocracy[7] and contain several subgroups within the caste, which are now treated as ritually equal.

The term Chatharīya is the derivative of the word ‘Kshatriya’, the second varna of the traditional Hindu varnashrama comprising kings, warriors, and administrators.

[7] Being absorbed in the Newar society, all these groups retained their Kṣatriya varna-status while acquiring the local title of Srēṣṭha to the new populace.

[7] The use of the word Chatharīya seems to have been derived only since the 16th/17th century from the attempts of few powerful and highly influential Kṣatriya lineages of the time, like the Pradhān and Rathore/Gwongajuu nobles, to demarcate themselves as a separate, higher group from other high-caste Srēṣṭhas.

Notably, the Pradhāns of Patan was a very powerful courtier clan who made and unmade Malla and early Shah kings on their whim.

[18] This group also consist of the "fallen" Brahmins - Joshī, the astrologers; and Karmāchārya, the Tantric priests - both of which once part of Rājopadhyāyā Brāhmin caste but due to their disregard of Brahmanical percepts (like marrying non-Brahmin brides) are now “degraded” to Kshatriya status - are regarded as non-Brahmins performing the duties of Hindu priests in the various shrines of the Valley.

[21][22] Believed to be of Vaishya origin, well-renowned and traditional Pāñchthariya families include - sweetmakers Madhika:mi(माधि:कर्मी); metal-workers Nyāchhyoñ(न्याछोँ); money-lenders and tenants Kācchipati(काछिपती); traditional merchant clan Shahukahala (शाहुखल); others include Bhaju (भाजु), Deoju (देउजु), Nāeju (नायजु), Chhipi (छिपी), Bhocchibhoya (भोचिभोया), Duwal (दुवल), Singh (सिंह), Sakhakarmi (साख:कर्मी), Syāyabaji (स्याबजी).

[24] One of the reasons behind it is the adoption of Shrestha as one’s surname once a family belonging to any of the Newar caste moves to settle far off places from the Kathmandu Valley.

[27] Similarly, outside Nepal, for instance in Darjeeling and Sikkim, almost all the Newars used ‘Pradhān’, another high-caste Srēṣṭha surname, as their common name.