Section 5: Function, Duties and Powers of the Bank

1) In order to achieve the objectives referred to in Section 4, the functions, duties and powers of the Bank shall be as follows:

(a) To issue banknotes and coins,

(b) To formulate necessary monetary policies in order to maintain price stability and to implement or cause to implement them,

(c) To formulate foreign exchange policies and to implement or cause to implement them,

(d) To determine the system of foreign exchange rates,

(e) To manage and operate the foreign exchange reserve,

(f) To issue licenses to commercial banks and financial institutions to carry on banking and financial business and to regulate, inspect, supervise and monitor such transactions,

(f1) To issue directives and standards regarding the regulation, inspection and supervision of cooperative organisations engaged in savings and loan transactions,

*(f2) To regulate, inspect and supervise cooperative organisations with a share capital exceeding fifty million rupees or with an annual turnover equal to that amount, based on the financial governance and risk, at the request of the Department of Cooperatives, by exercising the powers of the prevailing laws relating to cooperatives,

(g) To act as a banker, advisor and financial agent of the Government of Nepal,

(h) To act as the banker of commercial banks and financial institutions and to function as the lender of the last resort,

(i) To establish and promote the system of payment, clearing and settlement and to regulate these activities, and

*(i1) To operate open market transactions through necessary instruments for liquidity management,

(j) To implement or cause to implement any other necessary functions which the Bank has to carry out in order to achieve the objectives of the Bank under this Act,

2) While exercising the powers conferred by this Act or any other prevailing law, the Bank shall have the power to carry out different functions and take actions which are incidental thereto.

3) No one shall violate powers conferred on the Bank under this.

* Added by the Act to Amend Certain Acts Relating to the Prevention of Money Laundering and Promotion of Business Environment, 2080.

* Added By the Second Amendment.