chhatramani/nepal_legal_acts_corpus_english huggingface dataset:
Standard Weights and Measures Act, 1968

23a. Power to prohibit, take control of or confiscate: (1) If any person is found selling, distributing or using a measure or weight or a measuring or weighing instrument contrary to this Act, the Inspector may prohibit the use of, take control of, or confiscate such measuring or weighing instrument.

(2) The procedure for prohibiting use, taking control of, or confiscating a measure or weight or a measuring or weighing instrument under sub-section (1) shall be as prescribed. 24. Power of Nepal Government to grant exemption: The Nepal Government may, by notification published in the Nepal Gazette, make the following arrangements:

(a) to permit the use, in any particular type of transaction or in trade with foreign countries, of measures, weights, or measuring or weighing instruments of any system other than the metric system, even if not inspected, upon mere certification,

(b) to permit bringing into use any particular type of measuring or weighing instrument only after it has been inspected, and

(c) to exempt any particular type of measuring or weighing instrument from the requirement of inspection. 25. License required to use measure, weight or measuring, weighing instrument: A trader or businessman shall, within the prescribed time, pay the prescribed fee, register their name, and obtain a license [amended by the Second Amendment]. from the Inspector to use a measure, weight or measuring, weighing instrument.

[Amended by the Fourth Amendment]. 26. Not to be done without obtaining a license: No person shall, without obtaining a license as prescribed from an Inspector upon payment of the prescribed fee, in the course of their business, manufacture, repair, sell commercial measures or weights or measuring instruments or weighing instruments, or carry on the business of prescribed measuring or weighing services.

[Added by the Fifth Amendment]. 26a. Model Approval to be obtained: (1) A person or entity wishing to manufacture or import a measuring or weighing instrument shall obtain model approval from the Department before manufacturing or importing such instrument.

(2) The form of a measuring or weighing instrument manufactured or imported under sub-section (1) shall not be altered.

(3) The procedure for granting approval under sub-section (1) shall be as prescribed.

[Amended by the Fifth Amendment]. 27. Measurement and weight of sealed packages: (1) The measure or weight of the article contained in a sealed package shall be clearly mentioned and labeled.
Standard Weights and Measures Act, 1968

28. Functions and duties of Inspector: (1) The Inspector shall inspect measures and weights and measuring and weighing instruments in the area and at the time specified by the Controller.

(2) The Inspector shall inspect the measures or weights or measuring or weighing instruments brought before him/her for inspection in accordance with this Act and the Rules made hereunder, and if found correct, shall, upon receipt of the prescribed fee, affix the prescribed inspection stamp.

(3) No measure or weight or measuring or weighing instrument required to be inspected shall be kept without inspection.

(4) The Inspector may proceed to any place where commercial measures or weights or measuring or weighing instruments are kept, or where articles sold or given by such measures or weights or measuring or weighing instruments are located, and inspect them, or inspect the measure or weight of articles so sold or given.

(5) The Inspector may order any trader or any person appointed by him/her for work to produce the measures or weights or measuring or weighing instruments used by such trader or person, or in their possession, or kept at any place for the purpose of trade, and all related documents, and such trader or person shall also produce the instruments or documents as ordered.

(6) If an Inspector has reason to suspect that any person has committed or is about to commit any offence under this Act in relation to measures or weights or measuring or weighing instruments, he/she may take possession of such measures or weights or measuring or weighing instruments, or articles sold or given or about to be given by such measures or weights or measuring or weighing instruments, and all related documents.

(7) If an Inspector has reason to suspect that the measure or weight of an article in any sealed package is less than the measure or weight mentioned on the label of such package, he/she may break the seal of such package and inspect the measure or weight of the article contained in the package.

(8) If, upon inspection under sub-section (7), the measure or weight of the article of the package is found to be incorrect, the Inspector may take possession of the package and its contents, and if found correct, he/she shall pay the reasonable price of the package to its owner.

[Added by the Fifth Amendment]. (9) If any body or office of the province or local level within the Inspector's jurisdiction requests consultation regarding measures or weights or measuring or weighing instruments, the Inspector shall provide consultation thereon.

[Amended by the Fifth Amendment]. 29.
Standard Weights and Measures Act, 1968

29. Appeal: An appeal against a decision or sentence order made by an Inspector under this Act may be filed before the Controller, and an appeal against a decision or sentence order made by a District Court may be filed before the concerned High Court, within thirty-five days. Chapter-4

Penalties

[Amended by the Fifth Amendment]. 30. Penalty: (1) The Inspector shall impose a fine on a person or entity committing the following offences, as follows:

(a) for acting or causing to act contrary to sub-section (4) of Section 20, a fine of one thousand Rupees to five thousand Rupees,

(b) for failing to comply with a direction given by the Nepal Government under Section 21, or for acting contrary to such direction, a fine of five thousand Rupees to ten thousand Rupees,

(c) for using a measure or weight or a measuring or weighing instrument contrary to Section 25, a fine of one thousand Rupees to five thousand Rupees,

(d) for doing any act contrary to Section 27, a fine of five thousand Rupees to ten thousand Rupees,

(e) for selling or transacting on the basis of the measure or weight of any article, if the quantity taken or received or given or delivered is less or more than the quantity fixed by the measure or weight on the basis of which the purchase, sale or transaction was made, a fine of five thousand Rupees to twenty-five thousand Rupees, but in the case of construction materials, gold, silver or precious metals, petroleum products, LPG cylinders, or industries, a fine of fifty thousand Rupees to one hundred thousand Rupees.
Standard Weights and Measures Act, 1968

Explanation: For the purposes of this clause, "construction materials" includes cement, rebar, bricks, gravel, sand, geotextiles, paint, cement board, wood used for doors and windows, glass, UPVC, and electric wire.

(f) for doing any act contrary to sub-sections (1) and (5) of Section 20, Section 23, Section 26 and Section 26a., for carrying on an industry committing such act, for abetting any person to commit such act, or for obstructing or hindering an Inspector in the performance of his/her duty under this Act, a fine of up to twenty-five thousand Rupees, and

(g) for any other act contrary to this Act not mentioned in this Section, a fine of up to ten thousand Rupees.

(2) If any person makes or causes to make any standard measure or weight or measuring or weighing instrument counterfeit or less or more, or knowingly uses or keeps with the intention of using or sells or causes to sell such counterfeit or less or more measuring or weighing instrument as genuine, or defaces the stamp to be affixed to a standard measure or weight or measuring or weighing instrument under this Act, or affixes or causes to affix a forged stamp, or makes or keeps a forged stamp, or uses any other instrument or such article other than the actual measure or weight or measuring or weighing instrument to cause less or more, or keeps or causes to keep with the intention of causing less or more, or uses any technology to create fake software to cause less or more in the quantity of measure or weight, such person shall be liable to imprisonment for up to three years or a fine of three hundred thousand Rupees to five hundred thousand Rupees or both.

(3) If an Inspector knowingly affixes a stamp on a measure or weight or a measuring or weighing instrument contrary to this Act, he/she shall be liable to imprisonment for up to one year or a fine of up to ten thousand Rupees or both.

[Added by the Second Amendment]. 30a. Recovery as government dues: (1) A fine that is required to be deposited pursuant to a decision made by an Inspector under this Act shall be deposited with the concerned office within thirty-five days from the date of such decision.

(2) If the amount of fine is not deposited within the period under sub-section (1), such amount shall be recovered by the office or officer specified by the Nepal Government as a government due in accordance with the prevailing law. Chapter-5

Miscellaneous

31.
Standard Weights and Measures Act, 1968

Chapter-5

Miscellaneous

31. Legal validity of stamped measures, weights or measuring, weighing instruments: A measure or weight or a measuring or weighing instrument stamped in accordance with this Act or the Rules made hereunder shall be deemed correct until proven incorrect by a court. 32. Liability for offences by body corporate or firm: (1) If an offence under this Act is committed by a body corporate or a firm, at the time of such offence, the partner in the case of a firm, and the main administrative officer or officers managing such entity in the case of a body corporate, shall be deemed guilty and liable for punishment. Provided that such partner or main administrative officer or officers shall not be liable for punishment if they prove that they tried their best to prevent such offence or that they had no knowledge of such offence.

(2) Notwithstanding anything contained in sub-section (1), if a body corporate or a firm commits an offence under this Act, and it is proven that such offence occurred with the consent or negligence of a partner in the case of a firm, or of the main administrative officer or officers in the case of a body corporate, such partner or main administrative officer or officers shall be deemed to have committed the offence and shall be liable for punishment. 33. Protection for acts done in good faith: No government employee shall be prosecuted or subjected to any other legal proceedings in respect of any act done or intended to be done in good faith under this Act.

[Amended by the Some Nepal Acts Related to the Civil Code Amendment Act, 2075]. 33a. Investigation of cases: (1) Investigation and diary of cases relating to offences punishable under Sections 19a., 19b. and sub-section [amended by the Fifth Amendment]. (2) of Section 30 shall be conducted by the Inspector.

(2) Investigation and diary of cases relating to offences punishable under sub-section [amended
Payment and Settlement Act, 2019

Chapter-1

Preliminary

1. Short Title and Commencement: (1) This Act may be called the "Payment and Settlement Act, 2075".

(2) This Act shall commence immediately. 2. Definitions: Unless the subject or context otherwise requires, in this Act,-

(a) "License" means a license granted pursuant to Section 9 to operate a payment system or provide payment services.

(b) "RTGS (Real Time Gross Settlement System)" means a system through which settlement is made by crediting or debiting the bank account of the relevant party by settling each transaction of large value and urgent payments as determined by the Bank separately in real time through an automated electronic system.

(c) "Prescribed" or "as prescribed" means as prescribed in the regulations made or directives issued under this Act.

(d) "Settlement" means the act or process of settling or reconciling the claim or liability amounts of parties issuing and accepting payment instruments in accordance with the prevailing arrangement or system.

(e) "Large value" means the limit determined from time to time as high value by the Bank or an amount exceeding that limit.

(f) "Bank" means Nepal Rastra Bank established under the Nepal Rastra Bank Act, 2058.

(g) "Bank and financial institution" means banks and financial institutions established under the Banks and Financial Institutions Act, 2073.

(h) "Board" means the National Payment Board constituted pursuant to Section 3.

(i) "Payment instrument" means the payment instruments pursuant to Section 31.

(j) "Payment system" means any system through which the payment, clearing or settlement of any kind of payment claim or liability between customers, institutions or banks is made by means of a payment instrument.

(k) "Payment system operator" means an institution that carries out the operation, management and clearing of payment-related work, and said term also refers to an institution operating a clearing house, electronic card or other electronic (online) payment.

(l) "Payment service provider" means an institution providing payment-related services to customers, and said term also refers to an institution making payment of amounts for goods, services, property or other liabilities between the institution and customer, transferring amounts domestically and internationally, or operating payment transactions through electronic means.

(m) "Institution" means an institution established as a company pursuant to sub-section (1) of Section 6 and obtaining a license pursuant to Section 9, and said term also refers to banks and financial institutions.

(n) "Telecommunication service provider" means a company established pursuant to prevailing law that provides electronic information and communication services such as telephone, mobile and internet services.

(o) "Settlement bank" means a bank with which an institution has entered into an agreement pursuant to Section 12 for the purpose of clearing, settling and discharging liabilities of financial transactions related to payment.
Payment and Settlement Act, 2019

Chapter-2

National Payment Board

3. Constitution of National Payment Board: (1) A National Payment Board is hereby constituted consisting of the following Chairperson and members:-

(a) Governor of the Bank -Chairperson
(b) Secretary of the Ministry of Finance -Member
(c) One expert nominated by the Government of Nepal having the prescribed qualification -Member
(d) Auditor General -Member
(e) Deputy Governor looking after the relevant area of the Bank -Member
(f) Chairperson of Nepal Telecommunications Authority -Member
(g) Executive Director of the Payment System Department of the Bank -Member-Secretary

(2) The term of office of the member pursuant to clause (c) of sub-section (1) shall be two years.

(3) Notwithstanding anything written in sub-section (2), if the nominated member pursuant to clause (c) of sub-section (1) fails to perform work according to his/her office, the Government of Nepal may remove him/her at any time. Provided that before such removal, he/she shall be given a reasonable opportunity to submit a defense.

(4) The meeting of the Board shall be held on the date, time and place specified by the Chairperson as per requirement.

(5) The Member-Secretary shall make available to all members the subjects to be discussed in the meeting at least twenty-four hours before the Board meeting.

(6) If at least fifty-one percent of the members are present, the quorum for the Board meeting shall be deemed to be complete.

(7) The meeting shall be chaired by the Chairperson, and in the absence of the Chairperson, the Secretary of the Ministry of Finance shall chair the meeting.

(8) The decision of the majority shall be valid in the meeting, and if the votes are equal, the person chairing the meeting shall give a casting vote.

(9) The Board may, if it deems necessary, invite experts or other office bearers related to payment, clearing or settlement to the Board meeting.

(10) The decision of the meeting shall be recorded in a separate register, and the person chairing the meeting and all members present shall sign such register.

(11) The decision of the Board shall be certified and kept by the Member-Secretary of the Board.

(12) The Secretariat of the Board shall be located in the department of the Bank designated by the Bank.

(13) Other procedures relating to the Board meeting shall be as determined by the Board itself. 4.
Payment and Settlement Act, 2019

4. Functions, Duties and Powers of the Board: The functions, duties and powers of the Board shall be as follows:-

(a) To make policy provisions regarding making the payment system safe, systematic and efficient to maintain financial stability, reduce risks, enhance the reliability of the payment system and modernize the payment system,
(b) To coordinate, or cause to coordinate, among companies related to the payment system,
(c) To conduct, or cause to conduct, regular monitoring, regulation and oversight of the work performed relating to the payment system,
(d) To give necessary directives from time to time to companies and telecommunication service providers regarding making the work relating to the payment system safe and systematic,
(e) To take necessary action against an institution acting contrary to this Act or direct the relevant department of the Bank to write to the concerned body for such action,
(f) To form various technical committees and sub-committees as necessary to monitor, regulate and oversee whether the payment system is being operated safely and systematically. Chapter-3

License

5. Not to Operate Service without License: No person shall operate a payment system or work as a payment service provider or operate such service pursuant to this Act without obtaining a license from the Bank. 6. Company to be Established: (1) A person wishing to work as a payment system operator or payment service provider pursuant to this Act shall establish a company pursuant to prevailing law.

(2) Notwithstanding anything written in sub-section (1), a bank or financial institution shall not be required to establish a company again for the purpose of sub-section (1).

(3) Notwithstanding anything written elsewhere in this Section, banks and financial institutions and payment service provider institutions may, for the purpose of working as a payment service provider pursuant to this Act, establish another company, give such service by contracting with another company, or appoint an agent for such work. 7.
Payment and Settlement Act, 2019

7. Letter of Intent to be Obtained: (1) A person wishing to work as a payment system operator or payment service provider shall, before establishing a company pursuant to Section 6, submit an application to the Bank for a letter of intent along with the following documents and the prescribed fee:-

(a) Memorandum of Association and Articles of Association of the proposed company,
(b) Business and technical feasibility study report,
(c) Personal details of the promoter in the prescribed format,
(d) Copy of the citizenship certificate of the promoter,
(e) Details disclosing the source of investment of the promoter,
(f) Proof of tax payment for the fiscal year preceding the current fiscal year or a receipt of submission of income statement to the concerned Inland Revenue Office for that purpose,
(g) Power of Attorney if the application is submitted by a person other than the promoter on behalf of the company,
(h) Not being blacklisted or defaulted,
(i) Other documents prescribed by the Bank.

(2) Notwithstanding anything written in sub-section (1), an institution that has obtained permission from the Bank to conduct payment and settlement transactions before the commencement of this Act shall be deemed to have obtained a letter of intent pursuant to this Section.
Payment and Settlement Act, 2019

Provided that if such institution wishes to introduce a new payment instrument, it shall obtain the approval of the Bank for such instrument.

(3) If, upon examining the application received pursuant to sub-section (1), the Bank deems it appropriate to issue a letter of intent, it shall issue a letter of intent to the applicant in the prescribed format within ninety days of receipt of the application.

(4) While issuing a letter of intent pursuant to sub-section (3), institutions other than banks and financial institutions shall be issued a letter of intent permitting them to conduct only one of the transactions as a payment system operator or a payment service provider.

(5) Notwithstanding anything written in sub-section (3), the Bank may refuse to issue a letter of intent to the applicant in any of the following circumstances:-

(a) If all the details and documents required to be submitted pursuant to sub-section (1) are not submitted,
(b) If it does not appear appropriate to establish additional institutions based on financial and technical grounds such as the condition, size and market competition of the country's economy or the grounds mentioned in sub-section (2) of Section 14.

(6) If the letter of intent is refused pursuant to sub-section (5), the Bank shall give written notice with reasons thereof to the applicant.

(7) A person who has obtained a letter of intent pursuant to sub-section (3) shall establish a company pursuant to Section 6 within the period prescribed by the Bank.

(8) If the company is not established within the period pursuant to sub-section (7), such letter of intent shall automatically be void. 8.
Payment and Settlement Act, 2019

8. Application to be Submitted: (1) An institution registered as a company pursuant to Section 7 shall, within six months of obtaining the letter of intent, submit an application to the Bank along with the following details and documents for a license to operate a payment system or provide payment services:-

(a) Memorandum of Association and Articles of Association of the proposed company,
(b) Details of the office building with necessary services and facilities for operating the payment system or providing payment services, and if the building is rented, a copy of the rent agreement,
(c) Documents certifying the payment of the amount of shares the promoter of the institution has committed to take,
(d) Address of the main place of business and branch office, if confirmed,
(e) Nature of the transaction to be operated and the business plan of the institution,
(f) List of directors and officers of the institution and a declaration that such persons are qualified to be directors and officers pursuant to this Act,
(g) Commitment letter expressed by the company to maintain an internal control system for potential risk management,
(h) Other documents prescribed by the Bank.

(2) No action shall be taken concerning the letter of intent of an institution that does not submit an application for a license within the period pursuant to sub-section (1). 9. License to be Granted: (1) Within thirty days of receipt of the application pursuant to Section 8, the Bank shall carry out a physical inspection and investigation regarding the physical and technical infrastructure of the applicant institution.

(2) If, upon inspection and investigation pursuant to sub-section (1), it is deemed appropriate to grant a license to the applicant, the Bank shall, within sixty days from the date of receipt of the application, take a deposit of the amount as prescribed and grant a license to the applicant to work as a payment system operator or payment service provider. 10. Conditions may be Specified: (1) The Bank may, in the license issued pursuant to Section 9, specify necessary conditions to be complied with by the institution.

(2) In addition to sub-section (1), the Bank may, by issuing directives from time to time, specify additional conditions, remove existing conditions, or amend conditions.

(3) It shall be the duty of the concerned institution to comply with the conditions specified pursuant to sub-sections (1) and (2). 11.
Payment and Settlement Act, 2019

11. License may be Refused: (1) Notwithstanding anything written elsewhere in this Act, the Bank may refuse to grant a license to an applicant to work as a payment system operator or payment service provider in the following circumstances:-

(a) If the physical and technical infrastructure of the institution is found insufficient,
(b) If all the details and documents as mentioned in sub-section (1) of Section 8 are not submitted,
(c) If the deposit amount for the license is not deposited in the Bank within the period prescribed by the Bank.

(2) If the license is refused pursuant to sub-section (1), the Bank shall give written notice with reasons thereof to the applicant.

(3) The Bank shall not be liable for any loss or damage caused to the applicant by reason of refusal to grant a license pursuant to this Section. 12. Agreement to be Made: (1) Before operating its service, an institution shall, for the purpose of clearing, settlement, reconciliation or discharging liabilities of financial transactions pursuant to this Act, enter into an agreement with a settlement bank as prescribed.

(2) The institution shall open a separate account in the settlement bank with which it has entered into an agreement pursuant to sub-section (1) for payment and settlement transactions to be made pursuant to this Act. 13. Period and Renewal of License: (1) The period of a license granted pursuant to Section 9 shall be five years, except where renewed pursuant to this Act.

(2) The concerned institution shall, at least ninety days before the expiry of the license period pursuant to sub-section (1), submit an application to the Bank for renewal along with the prescribed fee.

(3) After receiving an application pursuant to sub-section (2), if upon investigation including physical inspection of such institution the Bank deems it appropriate to renew the license, it shall renew the license within sixty days from the date of receipt of the application.

(4) If it is not deemed appropriate to renew the license from the physical inspection and investigation pursuant to sub-section (3), written notice thereof shall be given to the applicant within seven days.

(5) If an application for renewal cannot be submitted for any reason within the period prescribed pursuant to sub-section (2), the license may be renewed within ninety days from the expiry of the license period by paying double the renewal fee applicable pursuant to this Act.

(6) The license of an institution that does not submit an application for renewal within the period prescribed pursuant to sub-section (5) shall be automatically void after the expiry of such license period.

(7) Other provisions relating to the renewal of the license shall be as prescribed. 14.
Payment and Settlement Act, 2019

14. Application to be Submitted to Add or Cancel Payment Instrument: (1) If an institution wishes to add any payment instrument not mentioned in the license obtained pursuant to this Act or to cancel any existing payment instrument, it shall submit an application to the Bank as prescribed.

(2) If, upon investigating the application received pursuant to sub-section (1) based on the following grounds, it is deemed appropriate to add a payment instrument or cancel an existing payment instrument, the Bank may permit the concerned institution to add or cancel such payment instrument:-

(a) State of the national economy,
(b) Effectiveness, transparency, and reliability of the payment service,
(c) Confidentiality of payment-related transactions,
(d) Inherent risk in the payment instrument,
(e) Guarantee of fast, efficient, and accessible service,
(f) Liquidity management,
(g) International practices and good practices,
(h) Protection of customer interests,
(i) Overall risk management methods, and
(j) Other subjects deemed appropriate by the Bank. 15. Details of Institutions to be Published: The Bank shall update and regularly publish details of institutions that have obtained licenses pursuant to this Act on its website as prescribed. 16. Paid-up Capital: The paid-up capital of an institution shall be as determined by the Bank from time to time. Chapter-4

Board of Directors of Institution

17. Constitution of Board of Directors: (1) Every institution shall have a Board of Directors consisting of at least three directors.

(2) The appointment of directors of an institution shall be made by the general meeting of the institution subject to prevailing law.

(3) A person chosen by the directors by majority among themselves shall be the chairperson of the Board of Directors.

(4) The qualification of a person to be appointed to the position of director of an institution other than a bank or financial institution and other provisions relating to the Board of Directors shall be as mentioned in the regulations made under this Act. 18.
Payment and Settlement Act, 2019

18. Functions, Duties and Powers of the Board of Directors: (1) Except for the work done by the general meeting of the institution, all functions, duties and powers to be performed by the institution in relation to payment, clearing and settlement from the Bank, subject to this Act, prevailing law, the Memorandum of Association and Articles of Association, shall vest in the Board of Directors.

(2) It shall be the duty of the Board of Directors of the concerned institution to manage the overall risk of the institution, operate the institution in the interest of customers, and maintain institutional governance.

(3) Other functions, duties and powers of the Board of Directors shall be as follows:-

(a) To make and implement necessary regulations, directives and procedures subject to this Act, prevailing law and directives of the Bank to operate the work to be done by the institution in a systematic manner,
(b) To approve the organizational structure of the institution,
(c) To prepare and implement internal control systems and risk management standards to prevent risks or risky situations while operating the payment system or providing payment services,
(d) To regularly monitor all the work to be done by the institution and operate or cause to operate the institution in an orderly manner,
(e) To cause to prepare an audit report with an annual report and submit it to the annual general meeting of the institution,
(f) To perform other functions as prescribed by the Bank from time to time.

(4) A director working in the capacity of a director of the institution shall be personally liable for any work done exceeding his/her jurisdiction.

(5) Other functions, duties and powers of the Board of Directors and the procedure relating to meetings and other provisions shall be as mentioned in the Memorandum of Association and Articles of Association of the institution. 19.
Payment and Settlement Act, 2019

19. Appointment and Service Terms of Chief Executive: (1) The Board of Directors shall, subject to this Act, the Memorandum of Association and Articles of Association of the institution, appoint a Chief Executive in the institution.

(2) The educational qualification and experience of the Chief Executive pursuant to sub-section (1) shall be as prescribed in the regulations made under this Act.

(3) The Board of Directors shall appoint a person qualified pursuant to sub-section (2) as the Chief Executive of the institution and inform the Bank thereof within seven days.

(4) The term of office of the Chief Executive shall normally be four years, and he/she may be re-appointed.

(5) The remuneration, terms of service and other facilities of the Chief Executive shall be as determined by the Board of Directors of the company.

(6) The remuneration, terms of service and other facilities of the Chief Executive shall be determined at the time of his/her appointment.

(7) Notwithstanding anything written elsewhere in this Section, the provisions relating to the Chief Executive of a bank or financial institution shall be as per prevailing law on that subject. 20. Functions, Duties and Powers of Chief Executive: The functions, duties and powers of the Chief Executive shall be as follows:-

(a) To implement, or cause to implement, the decisions of the general meeting or the Board of Directors,
(b) To work as the administrative head of the institution by exercising the powers obtained from the Board of Directors, subject to the Memorandum of Association and Articles of Association,
(c) To supervise and control the work related to operating the payment system or providing payment services,
(d) To prepare the annual budget and work plan of the institution and submit it to the Board of Directors for approval,
(e) To manage the manpower required for the institution, subject to the staff regulations,
(f) To operate the institution in accordance with the directives of the Bank and to carry out effective internal control and risk management,
(g) To operate the institution in the best interests of customers, shareholders and the institution,
(h) To perform the work related to payment and settlement quickly, efficiently, safely and systematically, subject to the regulations, directives and orders issued by the Bank. Chapter-5

Liabilities of Institution

21. Institution to be Affiliated: Every institution and the payment instruments issued by such institution shall be affiliated with the national payment (financial) switch and payment gateway according to the procedure determined by the Bank. 22.
Payment and Settlement Act, 2019

Chapter-5

Liabilities of Institution

21. Institution to be Affiliated: Every institution and the payment instruments issued by such institution shall be affiliated with the national payment (financial) switch and payment gateway according to the procedure determined by the Bank. 22. Service to be Operated: (1) An institution shall operate the payment system or provide payment services in accordance with this Act, the regulations made under this Act, the directives issued by the Bank, the conditions specified in the license, and the standards prescribed by other prevailing laws.

(2) The institution shall fully comply with the procedures relating to payment, clearing, settlement and reconciliation processes approved or issued by the Bank.

(3) The institution shall start the work as a payment system operator or payment service provider as mentioned in the license within the period specified in the license.

(4) The Bank may cancel the license of an institution that does not start work within the period pursuant to sub-section (3) as prescribed. 23. Records to be Kept Securely: (1) An institution shall keep the details of payment and settlement and related information and records secure by regularly monitoring or testing the security policy, framework, and measures or mechanisms adopted for operating the payment system or providing payment services.

(2) An institution shall, for the security, confidentiality and reliability of the payment system, arrange for authorized or certified computer mechanisms (certified software and hardware) and a secure data system (secured database, data backup, data center) and additionally arrange for a disaster recovery system to minimize potential damage.

(3) An institution shall keep the name, address, account number, transaction date, transaction amount, type of transfer, details of the account and amount from which the customer transferred the amount, order given by the customer to make payment or transfer, balance details, and other details and records as prescribed, securely for the period prescribed by the Bank. 24. Liquid Balance to be Maintained: (1) An institution shall, while providing payment services, maintain sufficient liquid balance in the settlement bank in such a manner that it does not fall below the quantum prescribed from time to time by the Bank, based on the nature of the transaction, volume of transaction, risk inherent in the transaction, etc., to cover the liability to be borne by the institution.

(2) In the event that the company is unable to pay the liability of a customer's transaction for any reason, the settlement bank shall have the liability to settle the same. 25.
Payment and Settlement Act, 2019

25. Accounts and Audit: (1) An institution shall keep its accounts, books of account, registers and accounting records accurately in accordance with prevailing accounting standards or generally accepted accounting principles, clearly reflecting the true state of transactions.

(2) An institution shall compulsorily get its financial and overall payment system audited within four months after the end of each fiscal year.

(3) An institution shall obtain the approval of the Bank as prescribed before making its annual financial statements public.

(4) Other provisions relating to the accounts and audit of an institution shall be as prescribed. 26. Information to be Provided: (1) An institution shall regularly inform customers about the services it provides, fees charged for using the service, conditions to be complied with by customers, and transaction operation procedures.

(2) An institution shall, upon request by a customer, provide details of transactions related to him/her in writing or through electronic means.

(3) If any error occurs in the course of conducting transactions through electronic means, the institution shall immediately inform the concerned customer thereof. 27. Details to be Submitted: An institution shall submit the following details and documents to the Bank through electronic means within the period prescribed by the Bank:-

(a) Number and details of accounts in operation,
(b) Transaction amount,
(c) Bank balance of the institution,
(d) Details of fraud and dispute-related incidents,
(e) Details of dispute status and resolution,
(f) Received complaints and suggestions,
(g) Service disruption or security-related incidents,
(h) Other details prescribed by the Bank. 28. Details to be Kept Confidential: (1) The Bank shall, subject to prevailing law, keep confidential the information, data, details, information and records received from any institution in the course of monitoring, regulating and overseeing the institution pursuant to this Act.

(2) An institution shall not make available the relationship between the institution and the customer, the institution's accounts, books of account, registers and details of accounts to anyone other than the concerned person.

(3) Notwithstanding anything written in sub-section (2), providing any information, data, details, information and records in the following circumstances shall not be deemed to have breached confidentiality:-

(a) If provided to the Bank in the course of overseeing the institution,
(b) If provided to a court in the course of a case or legal proceedings,
(c) If provided to an officer authorized by law to conduct investigation, inquiry, examination or prosecution in the course of investigation, inquiry, examination or prosecution,
(d) If provided to the concerned auditor in the course of audit. 29.
Payment and Settlement Act, 2019

29. Reporting Required: Every institution shall keep records of its transactions in accordance with the prevailing legal provisions on asset laundering and the directives issued by the Bank or concerned body in that regard, and report thereon to the concerned body in a timely manner. 30. Service to be Operated with Consumer Interest Protection: The company shall operate reliable and quality services by making arrangements for consumer interest protection and payment security while conducting transactions as a payment system or payment service provider. Chapter-6

Payment Instruments and Settlement

31. Payment Instruments: (1) The following payment instruments shall be used in the payment system:-

(a) Cash,
(b) Cheque,
(c) Electronic banking (e-banking),
(d) Payment card,
(e) Payment through SWIFT,
(f) Inter-bank payment,
(g) E-money (wallet),
(h) Mobile banking,
(i) Other payment instruments as prescribed.

(2) Other provisions relating to payment instruments shall be as prescribed. 32. Settlement of Transactions: (1) While settling each payment order or each payment transaction, the Bank or institution shall settle such order or transaction in real time on a gross basis.

(2) Notwithstanding anything written in sub-section (1), while settling transactions, the Bank or institution may settle transactions on a net basis by accounting intervals in a lump sum for payment orders or payment transactions received within a certain time interval based on debiting or crediting netting of accounts related to payment. Explanation: For the purpose of this sub-section, "Netting" means the system of settling net accounts through the Bank of transactions conducted between companies involved in payment and settlement work within a certain period according to the procedure prescribed by the Bank.

(3) Settlement of cash, transfer and SWIFT transactions shall be made pursuant to sub-section (1), and settlement of daily transactions through electronic cheque clearing shall be made pursuant to sub-section (2).

(4) Settlement of large value payment transactions made pursuant to RTGS shall be according to sub-section (1).

(5) While conducting electronic cheque clearing, transactions made through the clearing house shall be settled through the gross settlement or net settlement method as prescribed by the Bank. Explanation: For the purpose of this sub-section, "Gross settlement" means the settlement of transactions done separately according to the customer's order, and "Net settlement" means the lump sum settlement of transactions at a certain time interval or as determined by the Bank.

(6) Settlement of transactions related to the issuance of securities and debentures, interest calculation, dividend payment, principal and interest payment, ownership transfer, and purchase and sale shall be according to the prevailing law on securities and debentures. 33.
Payment and Settlement Act, 2019

33. Final Settlement: (1) An institution shall arrange for the final settlement of transactions through the Bank according to the directives given by the Bank from time to time in a fast, efficient and effective manner with reduced risk.

(2) An institution shall manage sufficient liquidity, collateral security and risk management so that the final settlement of a transaction can occur at any time.

(3) Regardless of whether the transaction in the Bank's account is gross or net, the final settlement of the transaction shall occur only after the actual transfer of funds.

(4) After the final settlement of a transaction, no payment shall be refunded or re-paid. Provided that, if a discrepancy in accounts occurs for any reason, it shall not be deemed to prevent reconciliation based on evidence.

(5) An institution may place any amount, liquid asset or instrument as collateral for security as determined by the Bank.

(6) The collateral placed as security pursuant to sub-section (5) shall also be used for fulfilling other payment-related liabilities to be borne by the institution.

(7) If the final settlement of payment is not covered by the Bank balance or the collateral or security placed pursuant to sub-section (5) at the time of final settlement of payment, the Bank may provide a loan to the institution so that the settlement occurs within any specific time prescribed, and if no time is prescribed, within the same day (intra-day). 34. Settlement to be Made through RTGS System: (1) Notwithstanding anything written elsewhere in this Act, large value and urgent payments (high value and critical payment) and settlement of transactions shall be made according to the RTGS gross or net system as prescribed by the Bank.

(2) Provisions regarding the operating procedure, membership, transaction limit, service fee, liquidity arrangement, risk management, transaction time, settlement method, etc., of the RTGS system shall be as prescribed. Chapter-7

Action, Offence and Punishment

35.
Payment and Settlement Act, 2019

Chapter-7

Action, Offence and Punishment

35. Action may be Taken: (1) The Bank may, based on the nature and severity of the violation, take any one or more of the following actions against an institution violating this Act, the regulations made under this Act, or the directives or orders issued by the Bank:-

(a) Giving a warning or admonition,
(b) Getting a commitment to take corrective measures,
(c) Specifying limits on transactions,
(d) Suspending the Board of Directors of the institution,
(e) Imposing partial or full restriction on the operation of the payment instrument,
(f) Canceling the license.

(2) The Bank may, based on the nature and severity of the violation, take any one or more of the following actions against a director or employee of an institution who fails to provide the details and documents requested by the Bank pursuant to this Act, the regulations made under this Act, or the directives or orders issued by the Bank:-

(a) Giving a warning or admonition,
(b) Ordering the Board of Directors of the concerned institution to place him/her under suspension or to withhold all facilities including salary and allowances,
(c) In the case of a director, ordering his/her removal from office, and in the case of an employee, ordering the Board of Directors of the concerned institution to retire him/her from service, notwithstanding any provision in the employee service conditions regulations of the institution,
(d) Recovering or causing to recover the misappropriated amount from the concerned offender.

(3) The Bank shall give a reasonable opportunity to submit a defense before proposing action against any institution or its officer or employee pursuant to sub-section (1) or (2). 36.
Payment and Settlement Act, 2019

36. Deemed to have Committed Offence: If any person commits any of the following acts, he/she shall be deemed to have committed an offence pursuant to this Act:-

(a) If he/she works or causes to work as a payment system operator or payment service provider without obtaining a license contrary to Section 5,
(b) If he/she mentions false or incorrect details in the application submitted to obtain a license pursuant to sub-section (1) of Section 8 or in the documents, information, details or data required to be submitted to the Bank pursuant to this Act,
(c) If he/she operates a service by adding or canceling payment instruments or makes any change in the payment system without the permission of the Bank pursuant to Section 14,
(d) If he/she fails to maintain confidentiality pursuant to Section 28,
(e) If he/she causes loss or damage to the property of the institution,
(f) If he/she obstructs or opposes the inspection, monitoring or oversight work conducted by the Bank,
(g) If he/she fails to comply with the directives given by the Bank or violates the conditions specified in the license,
(h) If he/she performs any other act contrary to the regulations made under this Act or the directives or orders issued by the Bank. 37.