Section 94: Order of Priority for Payment

1) The bank or financial institution subjected to mandatory liquidation shall have to pay its liabilities in the order of the following priority:-

(a) Expenses incurred for mandatory liquidation,

(b) Amount up to the amount paid for deposit security/insurance made as per the prevailing laws subject not to exceed the limitation of the total approved claimed amount of the depositor or the amount equivalent to the paid amount if payment has been made to the security/insurance organization incorporated as per the prevailing laws for security of deposit,

(c) The deposits remaining after payment made pursuant to Clause (b),

(d) Salary, allowances and amounts for other liabilities payable to employees of the bank or financial institution,

(e) Amount payable to the Government of Nepal, local bodies, and the Rastra Bank,

(f) Outstanding amounts payable to other banks or financial institutions as fees or valuation amounts,

(g) Amounts payable for other creditors and other claims;

(h) Shareholders according to the prevailing laws.

2) Notwithstanding anything contained elsewhere in the Chapter, in case any creditor submits an application agreeing to accept any of the assets that were not sold while auctioning pursuant to Section 91 in lieu of the amount which the bank or financial institution has to pay him/her, the Liquidator may transfer such assets to such creditor having fixed the value of such assets subject to the norms determined by the Rastra Bank.

3) Notwithstanding anything contained elsewhere in the Chapter, in case any asset has been pledged as security for the secured creditors, such asset shall be used only for fulfilling the liability towards them.