(1) The Government of Nepal may grant a loan to any organization from a foreign government or agency or other organization for the projects included in the approved development plan or for the purchase of new aircraft for the Nepal Airlines Corporation and may provide a guarantee for such loan. .

(2) According to sub-section (1) when the government of Nepal gives a guarantee, the reason for the institution to take a loan, the national interest involved in taking the loan, and to repay the principal and interest of the loan at the time specified in the agreement with the lending foreign government or agency or institution. (3) According to sub-section (1) the institution which has taken loan under the guarantee of the Government of Nepal shall not be allowed to reduce the capital and do any work that has the possibility of sinking the capital without the prior approval of the Government of Nepal. And it will be the duty of such organization to comply with the instructions given by the Government of Nepal from time to time regarding the work that falls within the scope of the loan.

(4) According to sub-section (1) if the organization receiving the loan under the guarantee of the Government of Nepal is dissolved or is likely to be dissolved. If the Nepalese government is concerned, the Nepalese government will withhold the assets of the institution and collect the amount of the guarantee and the interest on it. No one shall have a claim on the equity of the organization that takes the loan unless it is.

(6) If the organization receiving the loan under the guarantee of the Government of Nepal is likely to suffer losses or dissolve, then its partners if the organization is a firm, and if it is an organization other than the firm, the principal of the organization. The administrative officer should take the opinion of the board of directors and submit a detailed report immediately to the government of Nepal.

(7) If the organization receiving the loan under the guarantee of the government of Nepal fails to repay the principal or interest according to the agreement with the lending foreign government or agency or organization. In case of non-payment, the amount of principal or interest will be charged to the reserve fund or any other government fund.