chhatramani/Nepal-Legal-Text-Corpus-44laws huggingface dataset:
Bank and Financial Institution Act 2073

Chapter-10 Provisions on Merger and Acquisition of Bank or Financial Institutions

Section 72: Provisions on Agreement
Unless otherwise ordered by the Rastra Bank according to this Act, the banks or financial institutions having obtained theoretical approval of merger or acquisition shall have to enter into an agreement having stated the following matters:-
(a) Provisions concerning the protection of interests of depositors, creditors and shareholders,
(b) Provisions concerning valuation system and matching of assets and liabilities of bank or financial institutions,
(c) Provisions concerning management of investment and transaction, inter-agency ownership and inter-agency give and take, guarantee and assurance, management of non-banking transaction, assets and liabilities,
(d) Merger, merging and acquisition processes, the time to be taken and costs to be incurred,
(e) Operation and management structure and name list of Directors,
(f) Matching of levels of employees of both institutions or of the principal institution and of the target institution/s getting theoretical approval for merger or acquisition and matching of terms and conditions of services,
(g) Details of the shareholders with substantial ownership and of other shareholders,
(h) If the bank or financial institution is to be merged or acquired as a new bank or financial institution, the name, Memorandum of Association and Articles of Association, capital structure, restructuring and class,
(i) In the case of a foreign bank or financial institution, the letter of approval from the concerned regulating agency,
(j) In the case of a foreign bank or financial institution, matters as to whether or not acquire the business of a bank or financial institution in Nepal or sell the entire business of such bank or financial institution in Nepal,
(k) Grievance handling system of stakeholders,
(l) The prevailing laws and process for its compliance,
(m) Other necessary details required by the Rastra Bank.
Bank and Financial Institution Act 2073

Chapter-10 Provisions on Merger and Acquisition of Bank or Financial Institutions

Section 73: Provisions on Approval
1) The bank or financial institutions obtaining theoretical approval for initiating merger or acquisition process shall have to adopt special resolutions from their respective General Meetings and shall submit joint application to the Rastra Bank having attached therewith the agreement referred to in Section 72 and other matters prescribed by the Rastra Bank for final approval.
2) While carrying out inquiry into the application submitted pursuant to sub-section (1), the Rastra Bank, if it deems necessary, may ask for additional information or documents to concerned bank or financial institution.
3) While carrying out enquiry pursuant to sub-section(1) and (2), the Rastra Bank may give due consideration to the facts that whether or not the merger of the bank or financial institutions would create healthy competition in the financial sector of the country, whether or not monopoly or controlled practice of any bank or financial institution emerges; whether or not serious negative impact would cause in the financial market and depositors and also having conducted fit and proper test of the promoter/s who may has/have significant ownership in the institution to be created after the merger. After completion of the enquiry, Rastra Bank may grant final approval to the bank or financial institutions for merger or acquisition by prescribing any terms and conditions and or limitations.
4) The Rastra Bank shall, if it has not found to be appropriate to grant approval pursuant to sub-section (3), notify the concerned bank or financial institution along with reasons thereof within forty five days.
5) In case it would be difficult for the institutions obtained approval pursuant to sub-section (3) to comply with the provisions of this Act and directives of Rastra Bank due to merger or acquisition, the Rastra Bank may give privilege as prescribed on the basis of necessity and rationality.
6) Other provisions concerning merger and acquisition shall be as prescribed by the Rastra Bank.

Bank and Financial Institution Act 2073

Chapter-10 Provisions on Merger and Acquisition of Bank or Financial Institutions

Section 74: Transactions may be acquired
With prior approval of the Rastra Bank, any branch, office of any bank or financial institution or any property or transaction thereof may be acquired by, or transferred to, any other bank or financial institution on mutual consent.
Bank and Financial Institution Act 2073

Chapter-11 Voluntary Liquidation of Banks or Financial Institutions

Section 75: Voluntary Liquidation of Bank or Financial Institution
1) Any bank or financial institution willing to voluntary liquidation shall have to submit an application along with an action plan of voluntary liquidation.
2) In case the Rastra Bank is confident, upon an inquiry on the application submitted pursuant to Sub-Section (1), that such bank or financial institution or a branch or office of a foreign bank or financial institution is fully capable of paying all of its credits and liabilities, the Rastra Bank may grant theoretical consent, along with some terms and conditions, for voluntary liquidation.
3) The bank or financial institution obtaining theoretical approval from the Rastra Bank pursuant to Sub-Section (2) shall have to carry out the following functions:-
(a) To inform the Office of the Companies Registrar about obtaining theoretical approval within seven days from the date of obtaining;
(b) To send notice to all depositors, creditors or concerned persons by fast, efficient and reliable means about obtaining theoretical approval within thirty days from the date of obtaining;
(c) To publish a notice in national newspapers about obtaining theoretical approval within thirty days from the date of obtaining;
(d) To carry out other acts as prescribed by the Rastra Bank.
Bank and Financial Institution Act 2073

Chapter-11 Voluntary Liquidation of Banks or Financial Institutions

Section 76: Initiation of Voluntary Liquidation
1) The process of initiation of voluntary liquidation of a bank or financial institution shall be deemed to have been initiated from the date of grant final approval for voluntary liquidation by the Rastra Bank.
2) The bank or financial institution obtaining theoretical approval for voluntary liquidation pursuant to Section 75 shall have to complete the following acts before obtaining final approval of the voluntary liquidation from Rastra Bank:-
(a) All the deposits and liabilities have to be refunded or fulfilled within the set time limit,
(b) Operation of transactions has to be closed down, and no new transaction to be carried on,
(c) Exercise of other powers, except those essential for voluntary liquidation, shall not be allowed.
3) The Rastra Bank may issue necessary directives in the course of carrying out functions pursuant to sub-section (2).
4) In case a person entitled to get payment of the amount and other liabilities pursuant to Clause (a) of sub-section (2) does not come to receive the payment within the prescribed time limit, the said amount shall be deposited to the account as directed by the Rastra Bank.
5) The approval of voluntary liquidation will not cause any type of adverse effect on the rights and interests of the depositors and other creditors.
6)The bank or financial institution opting for voluntary liquidation shall, upon completion of the proceedings of this Act, have to submit to the Rastra Bank an auditing report of such bank or financial institution.
7) The Rastra Bank shall grant final approval for voluntary liquidation to the bank or financial institution that accomplished the function as referred to in this Section. The Rastra Bank shall revoke the license to carry out banking and financial transactions.
8) The amount to be paid by the bank or financial institution opting to voluntary liquidation for the deposits not claimed at the moment shall have to be separately retained as directed by the Rastra Bank.

Bank and Financial Institution Act 2073

Chapter-11 Voluntary Liquidation of Banks or Financial Institutions

Section 77: No Change in Liability
There shall be no change in the liability of any shareholder, Director, Chief Executive, official, employee or other person arising out of this Act or any other prevailing laws due to the liquidation of any bank or financial institution under this Chapter.
Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 78: Application may be filed before the Court for Mandatory Liquidation of Bank or  Financial Institution
1) The Rastra Bank may file an application to the court for mandatory liquidation of any bank or financial institution under this Chapter, and notice of the application of such action shall be published in a daily newspaper of the national level.
2) The Rastra Bank shall include the following documents along with the application filed before the court for initiation of the process of liquidation of any bank or financial institution pursuant to sub-section (1):-
(a) Details along with reasons for mandatory liquidation of the bank or financial institution that the situation referred to in Section 78 is prevailing,
(b) Financial statement of the bank or financial institution.
3) Notwithstanding anything contained in sub-section (1), any of the following persons may, with prior approval of the Rastra Bank, file an application to the court by mentioning the grounds to show the situation that a bank or financial institution may be subjected to mandatory liquidation pursuant to Section 79:-
(a) Joint application of the depositors having representation of more than 25 percent of the total deposit, who do not get the payment of the payable deposits or of more than one percent of the depositors,
(b) The person competent to file an application for mandatory liquidation according to the prevailing law relating to insolvency.
4) In case the court orders for initiation of the process of liquidation of a bank or financial institution based on the application referred to in sub-section (1) or (3), the process of mandatory liquidation of the bank or financial institution shall be commenced from the date of passing of such an order.

Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 79: Circumstances leading to Mandatory Liquidation of Bank or Financial Institution
The bank or financial institution may be subjected to mandatory liquidation in the following circumstances:-
(a) In case the matured deposit or the deposit to be repaid immediately or other financial liability could not be paid on time and is due,
(b) In case the capital fund of the bank or financial institution is negative,
(c) In case the Rastra Bank recommends for liquidation of a bank or financial institution based on an inspection report of the bank or financial institution,
(d)In case the shareholders with significant ownership or officials of a bank or financial institution frequently commit acts causing obstruction against the rights and interests of the depositors for the development of the financial system,
(e) In case of frequent violations of this Act and directives given by the Rastra Bank,
(f) In other situations, as determined by the Rastra Bank for mandatory liquidation of banks or financial institutions.
Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 80: Transaction to be Suspended
1) Immediately after submission of the application to the court pursuant to Section 78 for mandatory liquidation of a bank or financial institution, the Rastra Bank shall suspend entire financial transactions of such bank or financial institution.
2) The Rastra Bank may, while issuing an order for suspension of financial transactions pursuant to sub-section (1), revoke the license of such bank or financial institution.

Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 81: Appointment of Liquidator
1) The court may issue an order to the Rastra Bank to make a recommendation for the appointment of a liquidator for initiating the process of mandatory liquidation of any bank or financial institution.
2) In case the court issues an order pursuant to sub-section (1), the Rastra Bank shall recommend names of at least three persons for appointment to the Liquidator within fifteen days.
3) While making recommendations to the court by the Rastra Bank pursuant to sub-section (2), the persons having experience in the banking and financial sector from amongst the licensed insolvency practitioners according to the prevailing laws have to be recommended.
4) The court may appoint one of the three persons recommended pursuant to sub-section (2) as the Liquidator.
5) After the appointment of the Liquidator pursuant to sub-section (4), the Board of Directors of such bank or financial institution shall be deemed to have been ipso facto dissolved, and unless otherwise ordered by the Liquidator, services of entire officials and employees appointed by the bank or financial institution shall ipso facto be terminated.
6) In case the Liquidator appointed pursuant to sub-section (4) resigns, he/she dies, or the Rastra Bank deems that he/she is incompetent to perform the prescribed works, the Rastra Bank shall file an application to the court, according to this Section to appoint another Liquidator by removing such Liquidator.
7) Remuneration and terms and conditions of services of the Liquidator shall be as prescribed by the court on the recommendation of the Rastra Bank.
Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 84: Records of Assets and Liabilities
1) The Liquidator shall have to immediately prepare a record of the assets, liabilities or potential liabilities of the bank or financial institution being in mandatory liquidation as per this Act, and one copy of it shall be submitted to the Rastra Bank and one copy shall be retained at the concerned bank or financial institution.
2) The record to be prepared pursuant to sub-section (1) shall have to include the following details:-
(a) Liabilities towards the depositors and creditors of the bank or financial institution,
(b) Entire assets and all types of liabilities of the bank or financial institution, and its estimated costs,
(c) Contracts the bank or financial institution has entered into for procuring services,
(d) Significant transactions the bank or financial institution has made before six months of the date of the order issued for mandatory liquidation.
3) The record referred to in sub-section (1) shall have to be updated in every trimester and be made available when desired for inspection by the creditors.

Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 85: Transactions may be terminated
1) The Liquidator may terminate the following transactions of the bank or financial institution within six months of the date of the order issued by the court for mandatory liquidation of the bank or financial institution:-
(a) Any contract concluded by the bank or financial institution concerning employment,
(b) Any contract concluded for any services involving the bank or financial institution as a party,
(c) All functions and contracts being carried out by the bank or financial institution as in the capacity of a trustee,
(d) Any regular functions or business of the bank or financial institution or branches of the bank or financial institution according to need and circumstances,
(e) Any liabilities said to be borne by the bank or financial institution without any limit,
(f) Other functions or proceedings as prescribed by the Rastra Bank.
2) For the transactions terminated pursuant to sub-section (1), no any type of additional amount or compensation may be claimed other than the due amount to be paid or liability to be borne by the bank or financial institution till the date of termination of the transaction.
Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 86: Notice to submit claims
Upon initiating the process of mandatory liquidation of a bank or financial institution, the Liquidator shall, within the time prescribed by the Rastra Bank, have to publish a notice containing the following details asking the persons having any claim of any type with the bank or financial institution to submit his/her details of the claim within one month from the last date of publication of the notice stating his/her claims and the amount he/she may receive in a clear manner:-
(a) To publish a notice in daily Nepali and English languages newspapers at the national level,
(b) To publish such notices at the main places of businesses, banks, or financial institutions and post them at every office in a conspicuous manner.

Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 87: Liquidator may accept or reject claims
1) The Liquidator shall, within 90 days from the date of submission of the claim pursuant to Section 86, inquire into the claims and accept or reject the claim fully or partially based on the evidence available, and information thereof shall be given to the claimant and public notice thereof shall also be published.
2) The claimant having his/her claim partially accepted or rejected pursuant to sub-section (1) shall, within 15 days from the date of publication of notice thereof, have to submit his/her claims again, enclosing the additional evidence, if any.
3) In case there is the need for any change in the claims made pursuant to sub-section (2), the Liquidator may change it partially or wholly.
4) In case the claimant is not satisfied with the decision of the Liquidator made pursuant to sub-section (1) or (3), the claimant may file an appeal at a court within 21 days of receiving the decision sent by the Liquidator.

Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 88: Classification of Claims
1) The claims accepted, partially accepted or rejected pursuant to Section 87 shall have to be recorded separately with segregation in different titles.
2) The claims partially accepted pursuant to sub-section (1) shall have to be included in the accepted list, and the rest of the claims shall have to be included in the list of rejected claims.
3) While preparing a list of claims, the name and address of the claimant, place, date and amount of payment and whether or not collateral is there for securing the claim shall have to be clearly stated.
4) If there is a dispute as to a claim, such claim shall have to be stated in the list of disputed claims until a decision is made.
5) The Liquidator shall have to enlist the approved claims and the claims having no value fixed in the list as he/she has prescribed.
6) The claims of the secured creditors shall have to be separately classified.
7) The approved claims shall have to be listed so as to place them on priority in the payment process.
Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 89: Meeting of Creditors
1) The creditors of the bank or financial institution having its mandatory liquidation process initiated may form a Meeting of Creditors for mutual discussions and consensus.
2) Subject to the directives given and conditions as prescribed by the Rastra Bank, the Liquidator of the bank or financial institution subject to mandatory liquidation may have discussions and build consensus as may be necessary with the creditors and borrowers of such bank or financial institution.

Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 90: Liquidation Plan
1) Within thirty days of the completion of the classification of claims pursuant to Section 88, the liquidator shall prepare a detailed plan for the liquidation process of the bank or financial institution and submit it to the court for approval and inform the Rastra Bank thereof.
2) The liquidation plan to be submitted pursuant to Sub-section (1) shall include the following matters;
(a) Detailed description of the assets or liabilities of the bank or financial institution, their nature and results,
(b) Details of the past and projected income and expenditure of the bank or financial institution,
(c) Detailed description of the continuation or cancellation of the current financial transactions of the bank or financial institution,
(d) Decision or order made by the court,
(e) Details of the action taken to claim compensation for the offence or other illegal acts committed by the director, officer or employee of the bank or financial institution,
(f) Detailed description including classification of claims and priority of payment,
(g) Plan for sale and liquidity of the main assets or groups of assets of the bank or financial institution,
(h) Schedule of liabilities of the bank or financial institution and possible payments to be made to depositors and creditors within the next ninety days,
(i) Costs and expenses of compulsory liquidation,
(j) Other details specified by the Rastra Bank.
3) The liquidator shall update the liquidation plan pursuant to Sub-section (1) on a quarterly basis.
4) After the court approves the liquidation plan, it shall be made available for inspection to the creditors of the bank or financial institution whose claims are mentioned in the plan.
5) Notwithstanding anything contained elsewhere in this Act, a bank or financial institution that has been subject to compulsory liquidation shall not be recapitalised by investing in whole or in part.
Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 91: Advance Payment may be made to Depositors Immediately
1) Notwithstanding anything contained elsewhere in this Chapter, the depositors of the bank or financial institution subject to mandatory liquidation may be distributed up to one hundred thousand rupees per account as an advance with a condition to settle the account at the time of payment of the deposit.
2) The amount advanced payment pursuant to sub-section (1) shall be adjusted while making payment pursuant to Section 94.

Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 92: Powers to sell Assets
The Liquidator may, subject to the directives given by the Rastra Bank, cause the auction of the entire assets of the bank or financial institution, including the assets mortgaged as collateral security of the approved secured claim of the creditor’s bank or financial institution as follows:-
(a) At the place of transaction of the securities, foreign currencies or other assets that may be sold easily in the market,
(b) The securities given for security of the loan of creditor, foreign currencies or other assets that may be sold easily in the market by the creditors,
(c) In case the Liquidator deems that no reasonable value could be received by auction of assets, to sell it in any manner,
(d) To make other provisions as prescribed by the Rastra Bank.

Bank and Financial Institution Act 2073

Chapter-12 Provisions on Mandatory Liquidation of Bank or Financial Institutions

Section 93: Notice of Settlement of Claims
The Liquidator shall, in order to settle the claims according to the liquidation plan as referred to in Section 90, publish and broadcast public notice stating the nature, quantity and priority order for payment of the claims.