Section 59: Nepal Rastra Bank may take over Management

1) the Nepal Rastra Bank may, in any of the following circumstances, by furnishing information to the Department, suspend the Board of Directors of the Cooperative Bank and take over the management on its own or cause another agency to be taken it over:

(a) In case it is found from the auditing report of the Cooperative Bank or inspection report of the bank that it fails to comply with the directives issued by the Nepal Rastra Bank from time to time,

(b) In case it commits any act against the interests of members and incurs a loss to members,

(c) In case the operation of the Cooperative Bank is not efficient and effective, thereby, loss is caused to the Cooperative Bank.

2) Before the Board of the Cooperative Bank is to be suspended pursuant to sub-Section (1), the Cooperative Bank shall be provided with an opportunity of seven days to defend itself.

3) Upon an opportunity to defend given pursuant to sub-Section (2), in case the Cooperative Bank fails to submit the defence or the defence so submitted does not seem satisfactory, the Nepal Rastra Bank shall suspend the Board of the concerned bank and take over the management on its own or cause the management to be taken over by any other agency.

4) Notwithstanding anything contained elsewhere in this Section, while taking over the management by the Nepal Rastra Bank on its own or by any other agency, a representative of the Department shall also be involved.