Banks and Financial Institutions Act, 2017

6. Prior Approval Required for Opening a Branch Office of a Bank or Financial Institution: (1) If any internationally rated foreign bank or financial institution wishes to open a branch office in Nepal to conduct banking and financial transactions or non-banking financial transactions, it must obtain the approval of the Nepal Rastra Bank before opening such branch office.

(2) For the purpose of sub-section (1), an application must be submitted to the Nepal Rastra Bank along with the capital and fee prescribed by the Nepal Rastra Bank.

(3) When submitting an application under sub-section (2), such foreign bank or financial institution must, in addition to the details and documents mentioned in sub-section (1) of Section 5, submit the following additional documents and details:-

(a) Written commitment made by the Board of Directors regarding making available the amount required to fulfill all liabilities of the foreign bank or financial institution's branch or representative or contact office in Nepal in relation to its business operations, upon demand by the Nepal Rastra Bank,
(b) Details of the location where the proposed branch office of the foreign bank or financial institution will be situated,
(c) Details of the prospective officers of the proposed branch office of the foreign bank or financial institution.

(4) If, upon examining the documents or details submitted under sub-section (3), it appears necessary to request additional documents or details, the Nepal Rastra Bank may request the necessary documents or details from the concerned applicant.

(5) If, after the additional documents under sub-section (3) and documents requested under sub-section (4) are received and upon examining the application, it appears appropriate to grant prior approval, the Nepal Rastra Bank may, with or without imposing any condition, grant approval to such foreign bank or financial institution to open a branch office in Nepal within one hundred and twenty days from the date of receipt of such application.

(6) After obtaining prior approval under sub-section (5), such foreign bank or financial institution must register its branch office under the prevailing company law.

(7) The branch office of a foreign bank or financial institution registered under sub-section (6) must, for obtaining approval to conduct banking and financial transactions in Nepal, submit an application to the Nepal Rastra Bank along with the fee or charge prescribed by the Nepal Rastra Bank and attach the following documents and details:-

(a) Certificate of registration under the prevailing company law to conduct banking and financial transactions in Nepal as a branch office,
(b) Approval or consent letter from the government or central bank or regulatory body of the home country of the foreign bank or financial institution, in accordance with the law of that country, permitting such foreign bank or financial institution to open a branch office in Nepal,
(c) Details of any changes in any matter required to be fulfilled under this Act by such foreign bank or financial institution after submitting the application to the Nepal Rastra Bank for establishing the branch office or after obtaining prior approval from the Nepal Rastra Bank,
(d) Other information and details as requested by the Nepal Rastra Bank.

(8) If, upon examining the application received under sub-section (7), it appears appropriate to grant approval, the Nepal Rastra Bank may grant approval to such branch office of the foreign bank or financial institution to conduct banking and financial transactions in Nepal within ninety days from the date of submission of the application.

(9) While granting approval under sub-section (8), the Nepal Rastra Bank may also impose necessary conditions.

(10) A bank or financial institution may open a branch office outside Nepal with the approval of the Nepal Rastra Bank.

(11) The Nepal Rastra Bank shall formulate necessary policies from time to time regarding the opening of branch offices outside Nepal under sub-section (10).