Section 128: Nepal Rastra Bank may punish

1) Notwithstanding anything contained elsewhere in this Act, the Nepal Rastra Bank may punish as follows on a Cooperative Bank that violate the terms and conditions specified at the time of granting of a by the Nepal Rastra Bank or orders issued from time to time or directives issued in the course of inspection, supervision or regulation:

(a) To issue a warning or admonition in writing,

(b) To cause the Board of Directors to execute a bond for carrying out reformative actions,

(c) To issue an order in writing to end frequent violations, to refrain from it and to begin reformative actions,

(d) To impose full or partial restrictions on carrying out transactions,

(e) To suspend or revoke the license of the Cooperative Bank.

2) In case a director or employee of a Cooperative Bank violates orders, directives issued by the Nepal Rastra Bank or terms of the license; fails to submit document, statement, statistics or record demanded at the time of inspection and supervision; within the specified time or commits any act against interests of the depositors or members, the Nepal Rastra Bank may impose the following punishment on such a director or an employee:-

(a) To issue a warning or admonition in writing,

(b) To suspend him or her,

(c) To impose a fine not exceeding five hundred thousand rupees,

(d) To order the Board to suspend the payment of the entire benefits, such as salary, allowances,

(e) To order the Board to remove such a person from the office if such a person is a director and to take departmental actions if such a person is an employee according to the Byelaws relating to terms and conditions of service.

3) While imposing the fine under this Section, he/she shall be provided with a reasonable opportunity to defend himself/herself.