Section 6: Approval to be obtained to open Branch Office of Bank or Financial Institution

1) If any internationally rated foreign bank or financial institution desires to open a branch office to carry on banking and financial transactions or non-banking financial transactions within Nepal, prior approval of the Rastra Bank should be obtained before opening such a branch office.

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

3) While submitting the application pursuant to sub-section (2), such foreign bank or financial institution shall have to submit the following details and documents in addition to the details and documents as referred to in sub-section (1) of Section 5:-

(a) Written commitment of the Board of Directors that it will make available on demand of the Rastra Bank the amount necessary for fulfilling its entire liabilities with regard to business activities of its branch of representative or liaison office of concerned foreign bank or financial institution in Nepal,

(b) Details as to the location of the proposed branch office of the foreign bank or financial institution,

(c) Details as to the possible office bearers to be engaged in the proposed branch office of the foreign bank or financial institution.

4) The Rastra Bank may, If deemed necessary demand further documents or details while carrying out an inquiry to the documents or details submitted pursuant to sub-section (3), demand required documents or details from the concerned applicant.

5) The Rastra Bank may, if it deems appropriate to grant prior approval while carrying out an inquiry of the additional documents submitted pursuant to sub-section (3) and of the documents asked for submission pursuant to sub-section (4), grant approval to open a branch office in Nepal within one hundred twenty days after the filing of the application, with or without prescribing any conditions.

6) The foreign bank or financial institution, after obtaining prior approval pursuant to sub-section (5), shall have to register as the branch office according to the prevailing laws relating to companies.

7) The branch office of the foreign bank or financial institution registered pursuant to sub-section (6) shall have to submit an application before the Rastra Bank along with the following documents and details as well as the charge or fee as prescribed by the Rastra Bank for approval to carry on baking and financial transaction in Nepal:-

(a) Registration certificate of being registered according to the prevailing laws to carry on baking and financial transactions in Nepal as a branch office,

(b) Letter of approval or consent granted by the Government or central bank or regulating agency according to the law of the concerned country of the foreign bank or financial institution to open a branch office of such bank or financial institution in Nepal,

(c) Details of the discrepancy, if any, in any matter to be completed by the concerned foreign bank or financial institution under this Act after submission of application before the Rastra Bank for establishment of a branch office of the foreign bank or financial institution or after obtaining approval from the Rastra Bank,

(d) Other information and documents demanded by the Rastra Bank.

8) The Rastra Bank may, if it deems appropriate upon carrying out an inquiry over the application received pursuant to sub-section (7), grant approval to such branch office of a foreign bank or financial institution for carrying on banking and financial transaction in Nepal within 90 days from the date of filing the application.

9) The Rastra Bank may, while granting approval pursuant to sub-section (8), prescribe necessary terms and conditions.

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

11) The Rastra Bank may frame necessary policies from time to time with regard to opening branch offices outside of Nepal pursuant to sub-section (10).