Section 49: Loan and Refinance to Commercial Banks and Financial Institutions

1) The Bank may, subject to the terms and conditions prescribed by it, make available loans and refinances to commercial banks and financial institutions for a maximum period of one year against the security of the following assets:

(a) International negotiable instrument referred to in Clause (e) of sub-section (1) of Section 66,

(b) The debt bond issued by the Government of Nepal is payable within Nepal,

(c) The deposits accumulated in the Bank or the gold and precious metals, which the Bank may transact under this Act,

(d) The bill of exchange or the promissory notes referred to in sub-section (1) of Section 48,

(e) Other securities as prescribed.

2) Notwithstanding anything contained in sub-section (1) of the Bank may provide any credit to a commercial bank and financial institution for a maximum period of one year in cases where Government of Nepal has, for the sake of public interest and welfare, deemed it appropriate to provide loan and has requested the Bank therefor and Government of Nepal has given a guarantee of securities of prevailing market rate for such loan or in extraordinary circumstances where the Bank has to work as a lender of the last resort.

3) The credit offered as per sub-section (1) or (2) can be renewed for an additional year upon remaining under the conditions as prescribed.