Banks and Financial Institutions Act, 2017

33. Application to obtain a license to conduct banking and financial transactions: (1) A bank or financial institution desiring to conduct banking or financial transactions under this Act shall submit an application to the Nepal Rastra Bank along with the fee prescribed by the Nepal Rastra Bank.

(2) The application pursuant to sub-section (1) shall be accompanied by the following details and documents: -

(a) A copy of the memorandum and articles of association of the bank or financial institution and a certificate of incorporation under the prevailing law,

(b) Details of the office building where all necessary infrastructure for conducting transactions is ready, or a copy of the lease agreement if the building is to be rented, along with details of the rented building, and details that there is a sufficient basis to provide banking and financial services and facilities,

(c) Documents certifying that the amount of shares that the founders have agreed to take has been paid and deposited with the Nepal Rastra Bank,

(d) Bylaws relating to employee service, terms and facilities, financial administration bylaws, and credit write-off bylaws of the bank or financial institution,

(e) The address of the main place of business or branch if the location is finalized,

(f) Consent to comply with the conditions prescribed by the Nepal Rastra Bank for conducting banking and financial transactions,

(g) A business plan prepared covering the business strategy of the bank or financial institution, the nature of transactions to be conducted, internal control and risk management procedures, and organizational structure,

(h) The list of directors and officers of the bank or financial institution and details that they are qualified to be directors or officers under this Act,

(i) A commitment to maintain the minimum capital as prescribed by the Nepal Rastra Bank from time to time as long as banking and financial transactions are conducted,

(j) A commitment by the bank or financial institution to establish an internal control system to appropriately manage all potential risks,

(k) Other details and documents as prescribed by the Nepal Rastra Bank from time to time.

(3) In the case of a bank or financial institution established with joint investment in Nepal by a foreign bank or financial institution, in addition to the matters mentioned in sub-section (2), the following documents or details shall also be submitted to the Nepal Rastra Bank: -

(a) In the case of banks or financial institutions of class "ka", "kha", "ga" and "gha", an approval or consent letter from the government of the concerned country or the central bank or regulatory body, in accordance with the law of that country, permitting such foreign bank or financial institution to conduct banking and financial transactions in Nepal,

(b) Details, if any matter required to be fulfilled under this Act by such foreign bank or financial institution has changed after submitting the application to the Nepal Rastra Bank for establishing the foreign bank or financial institution or after obtaining permission from the Nepal Rastra Bank,

(c) Other information and details as required by the Nepal Rastra Bank.

(4) If, during the examination of the documents or details received pursuant to sub-section (2) or (3), any document or detail is found missing or insufficient, the Nepal Rastra Bank may request additional documents or details from such bank or financial institution.