Section 50: Acts not to be carried out by Bank or Financial Institution

1) A bank or financial institution shall not have to carry out or cause to be carried out any of the following acts:-

(a) To purchase and sell goods with the objective of the business and to purchase immovable land and to construct buildings except those that are necessary for its own purposes,

(b) To disburse credit against security of one’s own shares,

(c) To provide any type of credit facility to the Directors, a person having subscribed one percent or more than that of the paid-up capital, Chief Executive, or a member of the family of such persons, or the firm, company or organization having significant ownership or financial interest in any person, firm, company or organization having authority to nominate or appoint Director or managing agent,

(d) To provide any type of credit or facility exceeding per customer limit prescribed by the Rastra Bank from its capital fund to the single customer, company, companies or partnership firms of the same group and relevant person,

(e) To provide any type of credit to any person, firm, company or institution on the guarantee of promoters, Directors, or Chief Executive,

(f) To make an investment in the securities of the bank or financial institutions of class “A”, “B”, and “C”, classified by the Rastra Bank,

(g) To invest the amount more than the limit as prescribed by the Rastra Bank in the share capital of other institutions,

(h) To create any type of monopoly or other type of restrictive practices in banking and financial transactions in collusion with banks or financial institutions,

(i) To commit in any act to create an artificial hurdle in a competitive environment in financial sectors with the intention of getting an undue advantage,

(j) To carry out any other functions prescribed by the Rastra Bank, as the functions are not to be carried out by a bank or financial institutions.

2) Notwithstanding anything contained elsewhere in this Act, there shall be no restriction to carry on own banking and financial transactions or to provide housing or other facilities for its own employees according to prevailing Personnel Byelaws of bank or financial institution, to disburse any credit against the collateral security of the bond issued by Government of Nepal or Rastra Bank, amount deposited in any account or fixed deposits receipts or to make available credit and credit card facilities up to the prescribed limit to promoters, Directors, Chief
Executive or shareholders having subscribed more than one percent of shares against the collateral security of their own fixed deposit receipts and the bonds issued by the Government of Nepal or the Rastra Bank.