Section 54
Control Over Licensed Institutions
(1) Notwithstanding anything contained elsewhere in this Act, if the Rastra Bank is satisfied that a licensed institution has violated the Nepal Rastra Bank Act, 2058
(2002), this Act or the rules or bye-laws framed hereunder or the orders or directives issued hereunder or is satisfied, on the basis of the inspection and supervision report of the Rastra Bank, that a licensed institution has failed or is likely to fail to perform the obligations required to be performed by the licensed institution or that a bank or financial institution has not been operated smoothly or has done any thing contrary to the interests of its shareholders or depositors, the Rastra Bank may suspend the Board of Directors of such licensed institution and take such licensed institution under its control.
(2) After taking any licensed institution under its control pursuant to Sub-section (1), the Rastra Bank may either itself carry out the management of such licensed institution or cause such management to be carried out by any appropriate person, firm, company or institution appointed by it.
(3) The Rastra Bank shall, within one year after the management of a licensed institution has been carried out by itself or through any other person, firm, company or institution pursuant to Sub-section (2), perform, or cause to be performed, a financial and management audit, of such institution and publicly publish a report thereof.
(4) If the Rastra Bank is satisfied, from the report referred to in Sub-section (3), that the financial institution concerned has become incapable of performing the liabilities required to be performed by it or that such institution has reached a stage if it cannot be operated smoothly, the Rastra Bank may make an application to the Appellate Court for the cancellation of registration of such licensed institution.
(5) If the Rastra Bank is satisfied, from the report referred to in Sub-section (3), that the financial institution concerned has become capable of performing the liabilities required to be performed by it or that such institution has reached a stage if it can be operated smoothly, the Rastra Bank may take the following action:
(a) To remove the suspension of the Board of Directors of the licensed institution made pursuant to Sub-section (1) and again hand over the management of the institution to that Board, or
(b) To dismiss the Board of Directors of the licensed institution which has been suspended pursuant to Sub- section (1), form a new Board of Directors from amongst
the shareholders of the licensed institution, and hand over the management of that institution to the new Board, or
(c) To call a general meeting of the licensed institution, get a new Board of Directors formed by the meeting, and hand over the management of the licensed to the Board , or
(d) To take any such other action as the Rastra Bank thinks proper.
(6) Prior to taking a licensed institution under its control pursuant to Sub-section (1), the Rastra Bank shall give an opportunity to the concerned licensed institution to defend itself, by providing it with a time-limit not exceeding 15 days, according to the situation.
(7) The licensed institution concerned shall bear all expenses incurred by the Rastra Bank in every act and action done and taken by it after taking such institution under its control pursuant to this Section.
(8) The Rastra Bank shall give information on having taken\ any licensed institution under its control pursuant to Sub-section (1) to the Government of Nepal.
(2002), this Act or the rules or bye-laws framed hereunder or the orders or directives issued hereunder or is satisfied, on the basis of the inspection and supervision report of the Rastra Bank, that a licensed institution has failed or is likely to fail to perform the obligations required to be performed by the licensed institution or that a bank or financial institution has not been operated smoothly or has done any thing contrary to the interests of its shareholders or depositors, the Rastra Bank may suspend the Board of Directors of such licensed institution and take such licensed institution under its control.
(2) After taking any licensed institution under its control pursuant to Sub-section (1), the Rastra Bank may either itself carry out the management of such licensed institution or cause such management to be carried out by any appropriate person, firm, company or institution appointed by it.
(3) The Rastra Bank shall, within one year after the management of a licensed institution has been carried out by itself or through any other person, firm, company or institution pursuant to Sub-section (2), perform, or cause to be performed, a financial and management audit, of such institution and publicly publish a report thereof.
(4) If the Rastra Bank is satisfied, from the report referred to in Sub-section (3), that the financial institution concerned has become incapable of performing the liabilities required to be performed by it or that such institution has reached a stage if it cannot be operated smoothly, the Rastra Bank may make an application to the Appellate Court for the cancellation of registration of such licensed institution.
(5) If the Rastra Bank is satisfied, from the report referred to in Sub-section (3), that the financial institution concerned has become capable of performing the liabilities required to be performed by it or that such institution has reached a stage if it can be operated smoothly, the Rastra Bank may take the following action:
(a) To remove the suspension of the Board of Directors of the licensed institution made pursuant to Sub-section (1) and again hand over the management of the institution to that Board, or
(b) To dismiss the Board of Directors of the licensed institution which has been suspended pursuant to Sub- section (1), form a new Board of Directors from amongst
the shareholders of the licensed institution, and hand over the management of that institution to the new Board, or
(c) To call a general meeting of the licensed institution, get a new Board of Directors formed by the meeting, and hand over the management of the licensed to the Board , or
(d) To take any such other action as the Rastra Bank thinks proper.
(6) Prior to taking a licensed institution under its control pursuant to Sub-section (1), the Rastra Bank shall give an opportunity to the concerned licensed institution to defend itself, by providing it with a time-limit not exceeding 15 days, according to the situation.
(7) The licensed institution concerned shall bear all expenses incurred by the Rastra Bank in every act and action done and taken by it after taking such institution under its control pursuant to this Section.
(8) The Rastra Bank shall give information on having taken\ any licensed institution under its control pursuant to Sub-section (1) to the Government of Nepal.