Section 69
Banks Or Financial Institutions May Be Merged Or Acquisitioned
(1) A bank or financial institution may be merged with another bank or financial institution or a bank or financial institution may acquire another bank or financial institution by fulfilling the procedures prescribed by this Act and the Nepal Rastra Bank Act.
(2) A class “D” financial institution may be merged with or such institution may acquire another institution of the same class:
. Provided that, an infrastructure development bank and a bank or financial institution may not be merged into each other and none of them may acquire the other.
(3) Notwithstanding anything contained elsewhere in this Chapter, in cases where any of the following circumstances in regard to any bank or financial institution is found from an Inspection and Supervision Report of the Rastra Bank, the Rastra Bank may order by giving the reason thereof that any of its assets, liabilities, and business of such bank or financial institution merge or be merged into another bank or financial institution:-
a. The capital fund is inadequate or the financial position has been deteriorating for the last three years,
b. An act committed causing adverse effect on depositor’s interests and liabilities towards depositors or such a situation is existing,
c. It is necessary to enhance the competitive capacity at the national and international level for stability, development and promotion of the financial system.
(4) Notwithstanding anything contained elsewhere in this Chapter, if any of the following circumstances is regard to a bank or financial institution is found from an Inspection and Supervision Report of the Rastra Bank, the Rastra Bank may, by giving the reason thereof, order such a bank or financial institution to acquire or cause to be acquired another bank or financial institution:-
a. In cases where more than one bank or financial institution belonging to single group of persons, firms and companies are in operation and there is an unhealthy financial relation,
b. In cases where the rights and interests of the depositors, ordinary shareholders, and other costumers could not be protected due to the negative impact, if the bank or financial institution is operated in the status quo,
c. In cases where system-based risks are increased and the licensed institution is unable to pay its liabilities,
d. In cases where shares have not been issued in the ordinary group within the prescribed time, the issued shares have not been sold or subscribed, or the prescribed minimum proportional paid up capital has not been met,
e. In cases where the bank or financial institution is subjected to actions of rapid reforms for three times or more or good governance has become weak due to arising of frequent disputes in the Board of Directors of the bank or financial institution.
(5) While issuing an order by the Rastra Bank pursuant to Sub-Sections (3) or (4) for merger or acquisition of the bank or financial institution, it may specify the procedures thereof in such an order.
(2) A class “D” financial institution may be merged with or such institution may acquire another institution of the same class:
. Provided that, an infrastructure development bank and a bank or financial institution may not be merged into each other and none of them may acquire the other.
(3) Notwithstanding anything contained elsewhere in this Chapter, in cases where any of the following circumstances in regard to any bank or financial institution is found from an Inspection and Supervision Report of the Rastra Bank, the Rastra Bank may order by giving the reason thereof that any of its assets, liabilities, and business of such bank or financial institution merge or be merged into another bank or financial institution:-
a. The capital fund is inadequate or the financial position has been deteriorating for the last three years,
b. An act committed causing adverse effect on depositor’s interests and liabilities towards depositors or such a situation is existing,
c. It is necessary to enhance the competitive capacity at the national and international level for stability, development and promotion of the financial system.
(4) Notwithstanding anything contained elsewhere in this Chapter, if any of the following circumstances is regard to a bank or financial institution is found from an Inspection and Supervision Report of the Rastra Bank, the Rastra Bank may, by giving the reason thereof, order such a bank or financial institution to acquire or cause to be acquired another bank or financial institution:-
a. In cases where more than one bank or financial institution belonging to single group of persons, firms and companies are in operation and there is an unhealthy financial relation,
b. In cases where the rights and interests of the depositors, ordinary shareholders, and other costumers could not be protected due to the negative impact, if the bank or financial institution is operated in the status quo,
c. In cases where system-based risks are increased and the licensed institution is unable to pay its liabilities,
d. In cases where shares have not been issued in the ordinary group within the prescribed time, the issued shares have not been sold or subscribed, or the prescribed minimum proportional paid up capital has not been met,
e. In cases where the bank or financial institution is subjected to actions of rapid reforms for three times or more or good governance has become weak due to arising of frequent disputes in the Board of Directors of the bank or financial institution.
(5) While issuing an order by the Rastra Bank pursuant to Sub-Sections (3) or (4) for merger or acquisition of the bank or financial institution, it may specify the procedures thereof in such an order.