Section 109: Banking Secrecy to be Maintained

1) The relationship between a bank or financial institution and its customers and information pertaining to its accounts, records, books, ledgers and statements shall not be disclosed to any person other than the concerned person.

2) Notwithstanding anything contained in sub-section (1), the secrecy shall not be deemed to have been violated if the details or information of any person remained in the bank or financial institution is provided in the following manner: –

(a) If the details or information is provided to the Rastra Bank pursuant to this Act or Rastra Bank Act or the Rules or By-laws framed thereunder or the orders or directives issued thereunder or if the details or information is shared between banks or financial institutions in the course of exchanging credit information,

(b) If the details or information is provided to the court in connection with any litigation or any other legal action,

(c) If such notice or information is provided to the legally authorized official inquiries and investigations or prosecution, in connection with such inquiries and investigations or prosecution; or if it is provided to the enquiry committee or the investigation officer authorized by the other prevailing laws, in the course of enquiries or if such information is provided to the regulatory bodies,

(d) If any details or information is provided to the auditor in the course of auditing,

(e) If any details or information is provided to a foreign country in accordance with prevailing laws relating to mutual legal assistance,

(f) If, in the course of the investigation of any case of a specific nature, the Government of Nepal, Ministry of Finance, has made a request, accompanied by the reason therefor, for providing the details of the account of the bank or financial institution or any details of the account of any person, firm, company or institution maintained with the bank or financial institution, and if the Rastra Bank has given direction for the same.

3) No one shall divulge any information or details received under sub-section (2) to any unauthorized person.

4) Except in the situation as mentioned in sub-section (2), the Directors, Chief Executive, employees, auditor, advisors of a bank or financial institution or any other relevant person shall not divulge the secrecy of the accounts, records, books, ledgers and any other information of the bank or financial institution the confidentiality of which is required to be maintained in such a manner as to undermine the relationship between the bank or financial institution and its customers.