Section 40: Special Provision on Branch of Foreign Bank

1) In case the Rastra Bank has granted a license to an internationally classified foreign bank to carry on banking and financial transactions through a branch in Nepal, the branch so established in Nepal as per the prevailing law shall be deemed as equivalent to the bank or financial institution established under this Act and unless otherwise provided by this Act or
Rules, By-laws, orders or directives framed under this Act and all other provisions shall be applicable equally, even in the case of such a branch.

2) The Rastra Bank may issue necessary directives with regard to the responsibility of the officials and employees taking responsibility for the functions, duties, powers, responsibility, liability, assets, accounts, etc., of the branch of the foreign bank and carrying out such functions.

3) The branch of a foreign bank located in Nepal shall, while using its assets in the course of bearing its responsibility, give priority to its liability towards Nepal, subject not to adverse effects in any other legal provisions.

4) Notwithstanding anything contained elsewhere in this Act, a branch of the foreign bank may carry on wholesale banking transactions.

5) The function and activities of the branch office of a foreign bank shall be as prescribed by the Rastra Bank.