Banks and Financial Institutions Act, 2017

2. Definitions: Unless the subject or context otherwise requires, in this Act,-

(a) "Court" means the Commercial Bench of the Court designated by the Government of Nepal, with the consent of the Supreme Court, by publishing a notice in the Nepal Gazette.

(b) "Chairperson" means the Chairperson of the Board of Directors, and this term also includes the Executive Chairperson.

(c) "License" means a license issued by the Nepal Rastra Bank in the name of a bank or financial institution to carry out banking and financial transactions pursuant to this Act.

(d) "Licensed Transaction" means banking and financial transactions carried out by a bank or financial institution after obtaining a license pursuant to this Act.

(e) "Licensed Institution" means a bank or financial institution that has obtained a license to carry out banking and financial transactions pursuant to this Act.

(f) "Significant Ownership" means a situation where a person or institution, either alone or jointly with another person or institution, holds shares amounting to two percent or more of the paid-up capital of a bank or financial institution, or by reason of share ownership can influence the management of the bank or financial institution.

(g) "Borrower" means a person, firm, company or institution that takes a loan from a bank or financial institution.

(h) "Loan" means the amount disbursed, direct or indirect guarantee, interest or other charges on a loan, refinance, restructuring and renewal of a loan, guarantee issued for loan repayment, and other commitments provided by a bank or financial institution to a person, firm, company, institution or other commercial enterprise on the condition of repaying principal, interest or other charges within a specified period, and this term also includes any kind of debt designated by the Nepal Rastra Bank by publishing a public notice.

(i) "Chief Executive" means the Chief Executive Officer responsible for the operation of a bank or financial institution, and this term also includes the Executive Chairperson and Managing Director acting as the chief executive of the bank or financial institution.

(j) "Office" means the registered and central office of a bank or financial institution, and this term also includes branch offices of a bank or financial institution situated in Nepal and outside Nepal, and branch offices of a foreign bank or financial institution situated in Nepal.

(k) "Net Worth" means the amount arrived at after deducting external liabilities from the total assets appearing in the balance sheet of a bank or financial institution.

(l) "Non-Executive Director" means a director other than an executive director who performs the daily functions of a bank or financial institution.

(m) "Current Account" means an account in which the record of amounts deposited with a bank or financial institution that can be withdrawn at any time the customer desires is maintained.

(n) "Paid-up Capital" means the portion of the issued capital of a bank or financial institution that has been paid up by the shareholders.

(o) "Risk-Weighted Asset" means the total asset calculated by multiplying the amount under each on-balance sheet and off-balance sheet item of a bank or financial institution by the risk weight specified in the format prescribed by the Nepal Rastra Bank.

(p) "Liquid Asset" means the cash balance, balance in current account, balance maintained with the Nepal Rastra Bank, and assets of a bank or financial institution designated by the Nepal Rastra Bank from time to time as liquid assets.

(q) "Prescribed" or "As Prescribed" means as prescribed in the rules or regulations made under this Act.

(r) "Securities" means shares, stocks, bonds, debentures, debenture stocks or certificates relating to collective investment schemes issued by a bank or financial institution or a corporate body, or certificates, savings certificates or bonds issued by the Government of Nepal or issued by a corporate body on the guarantee of the Government of Nepal, and this term also includes other securities designated by the Securities Board as being tradable or transferable through the securities market, or options to purchase, sell or exchange such securities.

(s) "Articles of Association" means the articles of association of a bank or financial institution made pursuant to the prevailing company law.

(t) "Deposit" means an amount deposited with a bank or financial institution through a customer in a current, savings or fixed account, with or without interest, and this term also includes amounts accepted by a bank or financial institution through various banking and financial instruments as determined by the Nepal Rastra Bank from time to time.

(u) "Deposit Insurance" means the protection of deposits and the act of insuring such deposits pursuant to Section 108.

(v) "Officer" means a director, chief executive, company secretary, and an employee of officer level authorized to make decisions on any subject of a bank or financial institution.

(w) "Family" means the spouse, son, daughter-in-law, daughter, adopted son, adopted daughter, father, mother, step-mother, and brother and sister-in-law, younger brother and sister-in-law, and elder sister who are dependent on a director for maintenance.