Section 48
Activities Prohibited For Being Carried Out By Licensed Institutions
(1) No licensed institution shall carry out, or cause to be carried out, the following activities:
(a) Purchasing or selling goods for commercial purpose, or purchasing any immovable property except when it is required for its own use;
Provided that this Clause shall not be deemed to prevent the licensed institutions of Classes “B” and “D” from purchasing, selling, distributing and managing lands and buildings in connection with carrying on their business transactions subject to Section 47.
(b) Advancing credit against the security of its own shares;
(c) Supplying credit or facility to any promoters, directors, persons who have subscribed one per cent or more of its shares, chief executive or any family member of such persons or to any firms, companies or institutions which are entitled to nominate or appoint directors;
(d) Supplying any type of credit or facility to any promoters, directors, persons who have subscribed one per cent or more of its shares, chief executive or any family member of such persons or managing agent or any firms, companies or institutions which are entitled to nominate or appoint directors or any firms, companies or
institutions in which the institution has a financial interest;
(e) Supplying credit or facility in an amount exceeding such percentage of its capital fund as may be prescribed by the Rastra Bank to a single customer, company and companies or partnership firms of a single group; Explanation: The expression “companies or partnership firms of a single group” means a group of such companies or partnership firms as may be prescribed by the Rastra Bank from time to time.
(f) Supplying any type of credit to any person, firm, company or institution against the guarantee given by the promoters, directors or chief executive;
(g) Making investment in the securities of those licensed institutions which have obtained permission from the Rastra Bank to carry on the financial transactions of
Classes “A”, “B” and “C”;
(h) Making investment of an amount exceeding the limit prescribed by the Rastra Bank in the share capital of any other institution;
(i) Indulging with other licensed institutions to mutually create any type of monopoly or any other type of controlled practice in the financial transactions;
(j) Doing any kind of act which is capable of creating an artificial obstruction in the competitive environment of the financial sector, with the intention of deriving undue advantage;
(k) Doing such other acts prohibited from being done by a licensed institution as may be prescribed by the Rastra Bank.
(2) Notwithstanding anything contained in Clause s (c) and
(d) of Sub-section (1) or elsewhere in this Act, nothing shall be deemed to bar the supplying of credit against loan-bonds or fixed deposit receipts issued by the Government of Nepal or the Rastra Bank or the providing of credit facility or advance under the provisions made the employee facilities to any promoter, director, chief executive or shareholder holding more than one percent of its shares in cases if such chief executive or shareholder is holding any post of such licensed
institution.
(3) No licensed institution shall, for the purpose of saving any person who makes deposits in an account of the funds earned by that in an illegal manner from legal action, provide any kind of assistance to such person to hide, convert, pay or transfer such funds or to hide or lie about the origin or source thereof or to do any thing for that purpose. If any licensed institution receives information about the commission of such act or suspects that any such act has been done, it shall forthwith provide particulars thereof to the Rastra Bank or to any other concerned body responsible for controlling deflection of currency.
(a) Purchasing or selling goods for commercial purpose, or purchasing any immovable property except when it is required for its own use;
Provided that this Clause shall not be deemed to prevent the licensed institutions of Classes “B” and “D” from purchasing, selling, distributing and managing lands and buildings in connection with carrying on their business transactions subject to Section 47.
(b) Advancing credit against the security of its own shares;
(c) Supplying credit or facility to any promoters, directors, persons who have subscribed one per cent or more of its shares, chief executive or any family member of such persons or to any firms, companies or institutions which are entitled to nominate or appoint directors;
(d) Supplying any type of credit or facility to any promoters, directors, persons who have subscribed one per cent or more of its shares, chief executive or any family member of such persons or managing agent or any firms, companies or institutions which are entitled to nominate or appoint directors or any firms, companies or
institutions in which the institution has a financial interest;
(e) Supplying credit or facility in an amount exceeding such percentage of its capital fund as may be prescribed by the Rastra Bank to a single customer, company and companies or partnership firms of a single group; Explanation: The expression “companies or partnership firms of a single group” means a group of such companies or partnership firms as may be prescribed by the Rastra Bank from time to time.
(f) Supplying any type of credit to any person, firm, company or institution against the guarantee given by the promoters, directors or chief executive;
(g) Making investment in the securities of those licensed institutions which have obtained permission from the Rastra Bank to carry on the financial transactions of
Classes “A”, “B” and “C”;
(h) Making investment of an amount exceeding the limit prescribed by the Rastra Bank in the share capital of any other institution;
(i) Indulging with other licensed institutions to mutually create any type of monopoly or any other type of controlled practice in the financial transactions;
(j) Doing any kind of act which is capable of creating an artificial obstruction in the competitive environment of the financial sector, with the intention of deriving undue advantage;
(k) Doing such other acts prohibited from being done by a licensed institution as may be prescribed by the Rastra Bank.
(2) Notwithstanding anything contained in Clause s (c) and
(d) of Sub-section (1) or elsewhere in this Act, nothing shall be deemed to bar the supplying of credit against loan-bonds or fixed deposit receipts issued by the Government of Nepal or the Rastra Bank or the providing of credit facility or advance under the provisions made the employee facilities to any promoter, director, chief executive or shareholder holding more than one percent of its shares in cases if such chief executive or shareholder is holding any post of such licensed
institution.
(3) No licensed institution shall, for the purpose of saving any person who makes deposits in an account of the funds earned by that in an illegal manner from legal action, provide any kind of assistance to such person to hide, convert, pay or transfer such funds or to hide or lie about the origin or source thereof or to do any thing for that purpose. If any licensed institution receives information about the commission of such act or suspects that any such act has been done, it shall forthwith provide particulars thereof to the Rastra Bank or to any other concerned body responsible for controlling deflection of currency.