Section 72: Provisions on Agreement

Unless otherwise ordered by the Rastra Bank according to this Act, the banks or financial institutions having obtained theoretical approval of merger or acquisition shall have to enter into an agreement having stated the following matters:-

(a) Provisions concerning the protection of interests of depositors, creditors and shareholders,

(b) Provisions concerning valuation system and matching of assets and liabilities of bank or financial institutions,

(c) Provisions concerning management of investment and transaction, inter-agency ownership and inter-agency give and take, guarantee and assurance, management of non-banking transaction, assets and liabilities,

(d) Merger, merging and acquisition processes, the time to be taken and costs to be incurred,

(e) Operation and management structure and name list of Directors,

(f) Matching of levels of employees of both institutions or of the principal institution and of the target institution/s getting theoretical approval for merger or acquisition and matching of terms and conditions of services,

(g) Details of the shareholders with substantial ownership and of other shareholders,

(h) If the bank or financial institution is to be merged or acquired as a new bank or financial institution, the name, Memorandum of Association and Articles of Association, capital structure, restructuring and class,

(i) In the case of a foreign bank or financial institution, the letter of approval from the concerned regulating agency,

(j) In the case of a foreign bank or financial institution, matters as to whether or not acquire the business of a bank or financial institution in Nepal or sell the entire business of such bank or financial institution in Nepal,

(k) Grievance handling system of stakeholders,

(l) The prevailing laws and process for its compliance,

(m) Other necessary details required by the Rastra Bank.