Bank and Financial Institution Act 2073

Chapter-5 Provisions on License

Section 33: Application to be filed to obtain License for carrying on Banking and Financial  Transactions
1) A bank or financial institution desirous of carrying on banking or financial transactions pursuant to this Act shall make an application to the Rastra Bank for obtaining a license with a fee as prescribed by the Rastra Bank.
2) The bank or financial institution shall also enclose the following details and documents with the application to be made pursuant to Sub-Section (1): –
(a) A copy of the Memorandum of Association, Articles of Association of the bank or financial institution along with the certificate of incorporation according to the prevailing laws,
(b) Particulars of an office building equipped with all infrastructures required by the bank or financial institution to carry on financial transactions, or, if such building is to be rented, a copy of the lease agreement and the particulars of the building to be rented, including that there are enough bases for making available banking and financial services and facilities,
(c) Document evidencing that the amount of the shares undertaken to be subscribed by promoters is paid and deposited to the Rastra Bank,
(d) Byelaws Relating to Conditions of Service and Facilities of the Employees, Financial Administration Byelaws; and Bye-laws relating to Write-off of Loans of the bank or financial institution,
(e) Principal place of business or, if the address of the branches has been ascertained, address thereof,
(f) Consent that the terms and conditions set forth by the Rastra Bank for carrying out banking and financial transactions will be abided by,
(g) Business plan prepared by incorporating the business strategy of the bank or financial institution, an organisational structure suitable to the nature of the transaction to be operated, internal control and risk management process,
(h) Name list of the Directors and officials of the bank or financial institution and details stating that they are qualified to become the Director and officials according to this Act,
(i) Commitment to meet the minimum capital adequacy ratio set by the Rastra Bank from time to time until the bank or financial institution carries on banking and financial transactions,
(j) Commitment that the bank or financial institution will maintain an internal control system for proper management of all potential risks,
(k) Other details and documents specified by the Rastra Bank from time to time.
3)In case of a bank or financial institution to be established in a joint venture in Nepal by any foreign bank or financial institution, the following details and documents have also to be submitted to the Rastra Bank in addition to those matters mentioned in Sub-Section (2):-
(a) In the case of banks or financial institutions of Class “A”, “B”, “C” and “D”, a letter of consent or approval given by the government of the concerned country or central bank or regulating agency formed according to the laws of the concerned country of foreign bank or financial institution, for operating banking and financial transactions in Nepal by such foreign bank or financial institution,
(b) Upon submitting an application to the Rastra Bank to incorporate a foreign bank or financial institution or upon obtaining permission from the Rastra Bank, if any matter to be fulfilled by such foreign bank or financial institution under this Act could not be fulfilled, details of that matter,
(c) Other information and documents specified by the Rastra Bank.
4) The Rastra Bank may, if any documents or details are not adequate or sufficient while carrying out an enquiry to the documents and details received pursuant to Sub-Section (2) or (3), ask for additional documents or details from a concerned bank or financial institution.