Chapter-4 Functions, Duties and Powers of Bank
Power to make or cause to be made inspection or inquiry: (1) The Bank may, as required, make or cause to be made inspection or inquiry in relation to the activities or office of the institution.
(2) It shall be the duty of the concerned institution and26 employee to provide the documents or details as demanded by the person making inspection or inquiry in the course of making inspection or inquiry pursuant to Sub-section (1).
(3) Other provisions relating to the inspection or inquiry shall be as prescribed.
Power to give direction: (1) If, in the course of inspection or inquiry made pursuant to Sub-section (1), an institution is found to have committed any of the following acts, the Bank may give direction to the institution to make reforms in any activity to be carried out by the institution or to make any specific provision, within the period as specified by the Bank:
(a) Having failed to do any act as required to be done pursuant to this Act,
(b) Having done any ac that is contrary to the depositors/savers and27 borrowers,
(c) Having failed to properly maintain its books of accounts, accounts or documents,
(d) Having failed to abide by the terms specified and directions given by the Bank,
(e) Having misappropriated the funds of the institution or used the received amounts in any activity that is contrary to the objectives of this Act28 ,
(f) Having failed to provide such details, data or documents as demanded pursuant to this Act.
(2) The Bank may from time to time give directions to the institution in relation to the matters to be carried out by the institution pursuant to this Act or the Rules framed under this Act, and it shall be the duty of the concerned institution to abide by such directions.
Power to cancel license: (1) 29If any institution violates any direction given pursuant to Section 18, the Bank may warn it or restrict any act of the institution for reforms. If institution violates such direction for three times or does any of the following acts, the Bank may suspend or cancel the license of such an institution.
(a) If the institution abandons the act of financial intermediation,
(b) If the institution misappropriates the funds of the institution or does not use the amount in the purpose for which it has been obtained,
(c) If the institution has failed to make reforms or make any specific provision in relation to any activity with specification of the period,
(d) 30 If the institution fails to obtain renewal pursuant to the Association Registration Act, 2034 (1977) and Section 7 of this Act.
(2) Prior to issuing order to cancel the license pursuant to Sub-section (1), the Bank may, if it considers necessary, make necessary inquiry or examination in relation thereto.
(3) Prior to cancelling the license pursuant to Sub-section (1), the Bank shall give an opportunity to the concerned institution to submit explanation.
Power to prevent the carrying out of act of financial intermediation: If it is not appropriate to allow any institution to keep on carrying out the act of financial intermediation by the reason that the institution has done any act as referred to in Section 18, the Bank shall give an opportunity to such an institution to make necessary reforms, and may prevent such an institution from carrying the act of financial intermediation.
21.31 To give up carrying out of act of financial intermediation: If any institution makes an application to the Bank that it be relieved of carrying out of the act of financial intermediation and if it appears that all liabilities to be paid such an institution seem to have been paid up, the Bank may allow such an institution to stop doing the act of financial intermediation. Provided that, if such an institution is not able to pay up all liabilities, the Bank may prevent such an institution from carrying out the act of financial intermediation and shall write to the Government of Nepal for the payment of the liabilities from the assets of the institution pursuant to the Association Registration Act, 2034(1977).
21A.32 To recover from household properties of office-bearers: If any office-bearer of an institution carries out, or causes to be carried out the act of financial intermediation being guided by personal interest or with mala fide intention, and contrary to the objectives of this Act or misappropriates the amounts of the institution, the Bank shall recover, or cause to be recovered, the amount so misappropriated from the personal properties of such an office-bearer or from the movable and immovable properties held in his or her name and ownership in………….33 Nepal.