Section 7: Prior approval may be denied

1) The Rastra Bank may deny granting prior approval for incorporation of any bank or financial institution and for opening a branch office of the foreign bank or financial institution in the following circumstances:

(a) If the name or banking and financial transaction to be carried out by the proposed bank or financial institution is not found to be appropriate from the point of view of public interests, religion, ethnicity or traditional belief, etc.,

(b) If the objective of the proposed bank or financial institution is contrary to the prevailing laws

(c) If incorporation of the proposed bank or financial institution does not seem to be technically appropriate,

(d) If a study of the feasibility study report, details and documents of other infrastructures submitted by the proposed bank or financial institution do not provide a ground to believe that it may carry on
financial transactions healthily and competitively,

(e) If not all promoters of the proposed bank or financial institution have signed the Memorandum of Association and Articles of Association, also stating their names, addresses and number of shares subscribed by them, in the presence of a witness and the name and address of the witnesses have not been mentioned,

(f) If per person share investment limit and share ownership ratio has not been found to have been maintained as specified by the Rastra Bank from time to time,

(g) If it is found to be inconsistent with the policy relating to the incorporation of bank or financial institution and licensing policy issued by the Rastra Bank,

(h) If any condition as prescribed by the Rastra Bank has not been found to be fulfilled.

2) If Rastra Bank denies granting prior approval to the proposed bank or financial institution for any of the reasons referred to above, information shall be given to the applicant stating the reasons thereof