(1) In order to achieve the objectives referred to in Section 4, the functions, duties and powers of the Bank shall be as follows:
(a) To issue bank notes and coins;
(b) To formulate necessary monetary policies in order to maintain price stability and to implement or cause to implement them;
(c) To formulate foreign exchange policies and to implement or cause to implement them;
(d) To determine the system of foreign exchange rate;
(e) To manage and operate foreign exchange reserve;
(f) To issue license to commercial banks and financial institutions to carry on banking and financial business and to regulate, inspect, supervise and monitor such transactions;
(g) To act as a banker, advisor and financial agent of Government of Nepal;
(h) To act as the banker of commercial banks and financial institutions and to function as the lender of the last resort;
(i) To establish and promote the system of payment, clearing and settlement and to regulate these activities; and
(j) To implement or cause to implement any other necessary functions which the Bank has to carry out in order to achieve the objectives of the Bank under this Act;
(2) While exercising the powers conferred by this Act or any other prevailing law, the Bank shall have power to carry out other functions and take actions, which are incidental thereto.
(3) No one shall violate powers conferred on the Bank under this Act.