Nepal Rastra Bank Act, 2002

Chapter 1

Preliminary

1. Short Title and Commencement: (1) This Act may be called the "Nepal Rastra Bank Act, 2058 (2002)."

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

(a) "Bank" means the Nepal Rastra Bank established pursuant to Section 3.

(b) "Board" means the Board of Directors of the Bank constituted pursuant to Section 14.

(c) "Director" means a member of the Board, and the term also includes the Governor and the Deputy Governor.

(d) "Governor" means the Governor of the Bank appointed pursuant to Section 15.

(e) "Deputy Governor" means the Deputy Governor of the Bank appointed pursuant to Section 16.

(f) "Commercial Bank" means a commercial bank established under the prevailing law.

(g) "Financial Institution" means a financial institution established under the prevailing law for the purpose of providing credit for agricultural, cooperative, industrial or any other specific economic purpose or collecting deposits from the general public; and the term also includes an institution designated as a financial institution by the Government of Nepal by publishing a notice in the Nepal Gazette.

(h) "Currency" means all kinds of currency notes, postal orders, postal notes, money orders, cheques, drafts, travelers cheques, letters of credit, bills of exchange, promissory notes, credit cards; and the term also includes other monetary instruments of a similar nature designated by the Bank by publishing and disseminating a public notice as required.

(i) "Currency Note" means a bank note that is in circulation as cash, and the term also includes coins.

(j) "Foreign Currency" means any currency other than Nepali currency; and the term also includes Special Drawing Rights from the International Monetary Fund, Asian Currency Unit, European Currency Unit, and other instruments designated by the Bank by publishing and disseminating a public notice as required.

(k) "Nepali Currency" means currency denominated in Nepali rupees.

(l) "Convertible Foreign Currency" means foreign currency designated as convertible foreign currency by the Bank by publishing and disseminating a public notice as required.

(m) "Foreign Exchange" means foreign currency, all kinds of deposits, loans, balances, foreign securities payable or receivable in foreign currency, and internationally prevalent cheques, drafts, travelers cheques, electronic fund transfers, credit cards, letters of credit, bills of exchange, promissory notes payable or realizable in foreign currency; and the term also includes any other monetary instrument designated by the Bank by publishing and disseminating a public notice as required.

(n) "Foreign Exchange Transaction" means the act of buying or selling foreign exchange, taking or giving loans, or obtaining or giving foreign exchange in any other manner; and the term also includes the act of granting foreign exchange clearance by the Bank.

(o) "Licensed Person" means a person, firm, company or institution obtaining a license from the Bank to conduct foreign exchange transactions.

(p) "Letter of Credit" means a letter issued by one bank addressed to another bank authorizing it to accept cheques, drafts, hundis or bills of exchange drawn on it by a specified person up to a certain amount.

(q) "Securities" means shares, stock, bonds, debentures, debenture stock issued by any organized institution, or certificates relating to unit savings programs or group savings programs issued by any organized institution under the prevailing law, or negotiable deposit certificates; and the term also includes any security designated by the Government of Nepal by publishing a notice in the Nepal Gazette, as well as receipts for deposit of securities and rights and interests relating to securities.

(r) "Negotiation" means the transfer of a negotiable instrument to a person who is entitled to become its holder.

(s) "Negotiable Instrument" means a promissory note, bill of exchange or cheque.

(t) "Bill of Exchange" means an instrument in writing signed by one person directing another person to pay, unconditionally, a certain sum of money to a specified person or to the order of that person or to the bearer of the instrument, on a specified date, or after a certain period, or on demand.

(u) "Promissory Note" means an instrument in writing signed by a person containing an unconditional undertaking to pay a certain sum of money to a specified person or to the order of that person or to the bearer of the instrument, on a specified date or on demand.

(v) "Cheque" means a bill of exchange drawn on a bank payable on demand.

(w) "Loan" means a direct or indirect commitment to invest funds and the right to recover the invested amount in return, as well as the payment of interest or other charges on such loans, refinancing provided against the collateral of loans or investments, restructuring and renewal of loans, guarantees issued for the repayment of loans, and other commitments made for such repayment; and the term also includes any kind of debt.

(x) "Account" means a record, account or book maintained under the prevailing law in a manner that reflects the details of transactions; and the term also includes other documents evidencing such transactions.

(y) "Debt Security" means any instrument evidencing indebtedness, and the term also includes any other indebtedness instrument in book entry or certified form.

(z) "Monetary Liability" means bank notes and coins in circulation as shown in the balance sheet of the Bank.

(aa) "International Accounting Standard" means an internationally recognized accounting standard.

(ab) "Employee" means a person holding any position in the Bank.