(1) In cases where a bank or financial institution is found to have violated this Act, the Rastra Bank Act, or Rules, Bye-laws, Directives or Orders issued thereunder, the Rastra Bank may, depending upon the nature and gravity of the violation, take one or more of the following actions against the bank or financial institution:-a. To admonish or issue a warning in writing,
b. To cause the Board of Directors to enter into a bond for taking reformative steps,
c. To issue an order in writing not to violate this Act or Rastra Bank Act or Rules, Byelaws, Directives or Order framed thereunder or to take reformative steps,
d. To prohibit to distribute dividends or issuing bonus shares to the shareholders of bank or financial institution or to prohibit to distribute dividends or issues bonus shares,
e. To specify limits on, or prohibit, accepting deposits or disbursing credits or accepting deposits or disbursing credits by the bank or financial institution,
f. To impose complete or partial ban on the transactions of the bank or financial institution.
(2) The Rastra Bank may suspend or revoke a license to carry out banking or financial transactions issued to a bank or financial institution in the following circumstances:-
a. In cases where the banking and financial transactions are not initiated within six months from the date of obtaining the license for carrying out banking and financial transactions,
b. In cases where banking and financial transactions have been closed without obtaining approval from the Rastra Bank,
c. In cases where the bank or financial institution has operated banking and financial transactions in such a manner as to be against the interests of the depositors or it does not reimburse of fails to reimburse the deposited amount or amount whose maturity date has expired,
d. In cases where there is violation of or non-compliance with the Rastra Bank Act, this Act, and the Rules, Byelaws, Orders, Directives framed thereunder or the terms and conditions as fixed by the Rastra Bank,
e. If it is found that the bank or financial institution obtained the license submitting false descriptions,
f. If the deposits have not been guaranteed as per the prevailing laws.
(3) If a promoter, shareholder, Director, Chief Executive, office bearer, employee or any other relevant person of a bank or financial institution violates this Act or Rastra Bank Act, or Rules, Byelaws, Directives or Orders framed thereunder, the Rastra Bank may, depending on the nature and gravity of the violation, take one or more of the following actions:-
a. To forfeit and freeze the subscribed shares of the concerned bank or financial institution and to give direction to the Board of Directors to sell the said shares to other persons,
b. To give direction the Board of Directors to freeze or suspend some or all of the facilities including meeting allowances, monthly remuneration of the Board of Directors, Director, office bearer, employee or any other relevant person of the bank or financial institution,
c. If the Chairperson, Director, Chief Executive or the person acting in the capacity of the Chief Executive or an employee is, upon an inspection or monitoring of the Rastra Bank, found that such a person has not worked in the interests of the depositors, shareholders, and license holding institution, he/she may be removed from the said position by furnishing a written notification to that effect:
Provided that while taking actions under this clause, a time limit of three to fifteen days shall be given to such a person allowing him or her to submit explanations for defense from the allegation. Such a person shall not be entitled to get any compensation or benefits as set forth in the Personnel Byelaws in lien of termination of his or her service and he/she shall be deemed to be disqualified for service in any bank or financial institution obtaining a license from the Rastra Bank for a period of five years.
d. If the director, office bearer or other employee subjected to the actions referred to in Clause (c) does not receive the letter of taking actions or does not submit an explanation after receiving the letter, the Rastra Bank may inform about the actions taken through a public notice,
e. If any bank or financial institution is found to have taken or given remuneration or other facilities contrary to this Act or in an unnatural manner, to recover all of such service facilities or the amount to be required for such facilities and the interests to be accrued thereon from the person giving such facilities,
f. To issue an order to the bank or financial institution to write to the concerned agency to take action against the Director, office bearer or employee of the bank or financial institution where he/she is professionally affiliated.
(4) If it is found that any amount to be paid by a bank or financial institution resulted from recklessness or negligence of any Director, office bearer or employee, the Rastra Bank may issue an order to recover the amount from such a director, office bearer or employee.
(5) The Director, office bearer or employee shall pay personally within thirty-five days from the date of receipt of the information of the order issued pursuant to Sub-Section (4).
(6) If the amount payable within the time limit as referred to in Sub-Section (5) is not paid, the said amount shall be recovered as government due from any account of such a Director, office bearer or employee or from the account of any of his/her family members that has been kept at any bank or financial institution or from any movable or immovable property belonging to him or her or his or her family member.
(7) If the Rastra Bank carries out regulation, inspection, supervision or any other actions of any bank or financial institution pursuant to this Section and publishes or broadcasts public notices thereof, the concerned bank or financial institution shall pay the expenses incurred in connection with publishing or broadcasting such notices.