Section 323: Duty to operate and manage trust property properly

1) The trustee shall operate and manage the trust property properly, by exercising his or her capacity and diligence honestly.

2) In the operation and management of the trust property pursuant to sub-section (1), the trustee shall make arrangements to avoid any loss and damage to, and maintain the sustainability of, such property.

3) Except as otherwise provided for in the memorandum of incorporation, in the operation and management of the trust property pursuant to sub-sections (1) and (2), income earned from the trust property which is not required immediately to accomplish the objects of trust may be invested for the accomplishment of the objects of trust.

4) Except as otherwise provided for in the memorandum of incorporation, in making an investment pursuant to sub-section (3), it may be invested as follows, in the following proportion of the total sum:

(a) At least twenty-five percent in the purchase of bonds or treasury bills issued by the Government of Nepal or Nepal Rastra Bank or bonds guaranteed by the Government of Nepal,

(b) Deposit of a maximum of twenty-five percent in a fixed account with a commercial bank,

(c) Deposit of a maximum of ten percent in a fixed account with a development bank,

(d) A maximum of five percent in the subscription of ordinary shares of a commercial bank,

(e) Deposit of a maximum of ten percent in a fixed account with a finance company,

(f) A maximum of five percent in the subscription of such ordinary shares of an enlisted public limited company as are dealt publicly.

5) The trustee shall, from time to time, carry out monitoring as to the investment made pursuant to sub-section (4), and if it appears from such monitoring that the returns of investment made in one sector are less, such investment shall be withdrawn immediately and made in another sector yielding more returns, subject to the terms and restrictions of the investment.

6) In making monitoring or investment pursuant to sub-section (5), the opinion of an expert in the concerned sector may, as required, be obtained.

7) An opinion obtained pursuant to sub-section (6) may be taken as the basis for monitoring or investment.

8) The trustee shall maintain his or her personal property and the trust property separately and operate and manage the trust property accordingly, and in the event of a need to operate an account, separate accounts shall be maintained.