Section 7V: Regulatory Actions and Sanctions against a Reporting Entity

1) The Regulator may take any or all of the following actions or sanctions against a reporting entity failing to comply with any provisions of this Act, Rules, or Directive issued pursuant to sub-section (2) of section 7U:

(a) To issue written reprimand warnings,

(b) To impose fines from one million to NRs fifty million to the financial institution and from one hundred thousand to ten million to other reporting entities based on the gravity of violations  of this Act, rules or orders, or directives issued thereunder,

¹(b1) on repeated contravention of this Act or the regulations made under this Act or the guidelines issued or the orders or directions given, to impose the maximum penalty pursuant to clause (b) for each infringement based on the seriousness of such violation, the capital or annual turnover of the institution concerned,

(c) To impose full or partial restriction on the business, profession or transaction,

 (d) To suspend the registration or permission or license,

(e) To revoke the permission or license or cancel the registration.

2) The Regulator may impose other appropriate sanctions under prevailing laws if the sanctions provided in sub-section (1) are not sufficient to prevent the violation of the provisions of this Act or Rules or directives or orders thereunder. The imposed sanctions shall be effective, proportionate, and dissuasive.

3) When the regulatory body punishes the indicting institution in accordance with sub-section (1) or (2), the punishment shall be effective, proportionate, and deterrent.

4) The reporting entity shall take appropriate action against a staff or an official if it faces regulatory actions or sanctions under this Act due to the activities of such staff or officials as per its law or
prevailing laws.

¹4A) If the indicting body does not take action in accordance with sub-section (4), the regulating body may exercise the authority of the indicting body to take necessary action against such officer or employee of the indicting body or the concerned officer of the indicting body may be fined or removed from office or both according to clause (b) of sub-section (1) according to the condition of maintenance, the seriousness of the matter and the nature of the indicting body.

5) It shall provide a reasonable opportunity for clarification to the reporting entity before taking regulatory action or sanction pursuant to this section.

² 6) A reporting entity which is not satisfied with the action or sanction of the Regulator may appeal to the related High Court within thirty-five days.

^{1Added by to amend certain Acts relating to Prevention of Money Laundering and Promotion of Business Environment Act, 2080.}

^{2 Amended by to amend certain Acts relating to Prevention of Money Laundering and Promotion of Business Environment Act, 2080.}