Section 86E: The Reformative Measures and Power to be Used by the Bank or the Official Appointed by the Bank

1) Whatever may be mentioned in the Companies Act or other prevailing law, the bank itself or with the prior approval of the bank the official appointed by the bank can initiate one or more than one of the following actions for the purpose of restructuring of any problematic commercial bank or financial institution which is under the control of the bank by order issued under the provision of Clause (o) of sub-section (1) of the Section 86C:

(a) To cancel or suspend any transaction operating within or outside Nepal.

(b) To sell the assets of such a commercial bank or financial institution to any other commercial bank or financial institution on terms and conditions determined by the bank.

(c) To terminate the employment of the employees working in such a commercial bank or financial institution and to appoint new employees in their place as per necessity.

(d) To merge such a commercial bank or financial institution with another commercial bank or financial institution or arrange to transfer the assets and liabilities of such a commercial bank or financial institution, partially or wholly, to any other commercial bank or financial institution or any other body.

(e) To increase the capital, based on the standard determined by the bank, by selling the shares to other people to reduce the participation of the present shareholders or to restructure such a commercial bank or financial institution by reshuffling the board of directors.

(f) To reduce the capital reflecting the actual price of real assets of such a commercial bank or financial institution under the provision of Section 86H and determine the face value of the shares in the proportion of reduced capital.

(g) To do necessary managerial restructuring or corporate restructuring by closing the branches and transactions which are not properly running for the protection of the interests of the depositors, shareholders, creditors and the general public.

(h) To implement or cause to implement other measures determined by the bank to make the problematic commercial bank or financial institution competitive.

2) The reasonable opportunity of hearing should be provided to any commercial bank or financial institution before taking any decision under Clause (f) or (g) of sub-section (1).

Provided that, if the bank feels that prior opportunity of hearing can make negative effect to the interest of its depositors, shareholders, creditors or general public, the bank can provide the opportunity of hearing as soon as possible after making such decision and if the bank satisfied with the reason and basis presented during the time of hearing it can change or repeal the decision as per necessity.