Section 57
Provisions On Recovery Of Credit
(1) Notwithstanding anything contained in a deed of a loan or in the prevailing Nepal law, a bank or financial institutions may recover its principal and interests thereon, having selling through auction the assets kept as mortgage by the borrower in the name of the bank or financial institution, if the borrower fails to abide by the terms and conditions of the credit as mentioned in the deed or contract or fails to repay the credit and interest thereon to the bank or financial institution within the loan repayment schedule stipulated in the deed or fails to pay the damage or if the bank or financial institution finds upon monitoring pursuant to Section 56, that the borrower has misused the credit by using it for the purpose other than the purpose for which it was disbursed.
(2) Notwithstanding anything contained in the prevailing laws, in cases where a borrower relinquishes the title in any manner whatsoever over the assets mortgaged or the assets mortgaged as collateral security to the bank or financial institution or if the value of the collateral security, a bank or financial institution may ask such a borrower to keep more assets as collateral security decreases within the time limit specified by it and the borrower shall keep place additional collateral security within the time-limit prescribed by the bank or financial institution.
(3) In cases where a borrower fails to keep more assets as collateral within the time limit pursuant to Sub-Section (2) or the principal and interests thereon could not be recovered from the collateral security so mortgaged, the bank or financial institution may recover its principal and interests from the other movable or immovable property of the borrower according to the prevailing laws.
(4) In cases where any balance has remained after deducting the amount spent in connection with an auction or otherwise during the recovery of the principal, interest thereon or amount of damage, such balance shall be refunded to the concerned borrower
upon deduction of the principal, interest and the amount of damage payable to the bank or financial institution.
(5) Banks or financial institutions shall write to the concerned office to register or transfer of the ownership of the assets so auctioned as per this Section in the name of the person accepting the auction in accordance with the prevailing laws.
(6) In cases where a bank or financial institution writes for registration or transfer the ownership of the assets pursuant to Sub-Section (5), notwithstanding anything contained in the prevailing laws, the concerned office shall register or transfer the ownership of the assets as requested in the name of the person who accept such an action.
(7) In cases where no one accepts the movable or immovable assets in the course of carrying out auction by a bank or financial institution pursuant to this Section, a bank or financial institution may take the ownership of such assets as prescribed in its own name.
(8) A bank or financial institution that has taken the ownership of the asset in question in its own name pursuant to Sub-Section (7) shall request to the concerned office shall, In cases where such a request has been received notwithstanding anything contained in the prevailing laws, the concerned office shall register or transfer the ownership of the assets in the name of the concerned bank or financial institution.
(9) If the previous owner does not allow or obstruct the exercise of the possessory right over the property, accepted by any person or a bank or institution through auction, the concerned office of the Government of Nepal shall cause to be erased the possessory right over the property in question.
(10) No one shall not be entitled to hinder the recovery process of the credit written off by a licensed institution in accordance with the prevailing Credit Write-off Byelaws.
(11) In cases where a borrower does not repay the credit from a bank or financial institution and the interests accrued thereto and damage within the time limit stipulated in the deed of the credit or the contract, the bank or financial institution shall write to the Credit Information Center Limited to blacklist the borrower according to the prevailing laws.
(12) In cases where a credit could not be recovered even after taking actions against the borrower under this Section, the bank or financial institution may, for the purpose of recovering such credit amount, take actions for the recovery of the credit according to the prevailing laws including freezing of any other assets of the borrower located in a foreign country if it is possible.
(13) In cases where a credit could not be recovered even after taking all actions under this Section, the concerned bank or financial institution may request the Rastra Bank for making the necessary arrangements to withhold or confiscate the passport of the concerned borrower and to deprive him of any particular services to be made available by the State. Upon receipt of such request, the Rastra Bank shall forward the request to the Government of Nepal for necessary actions along with its opinion.
(14) Nothing herein is deemed to prevent taking legal actions for any offence as per the prevailing laws on the ground that a bank or financial institution had taken action against a person in connection with the recovery of its credit.
(2) Notwithstanding anything contained in the prevailing laws, in cases where a borrower relinquishes the title in any manner whatsoever over the assets mortgaged or the assets mortgaged as collateral security to the bank or financial institution or if the value of the collateral security, a bank or financial institution may ask such a borrower to keep more assets as collateral security decreases within the time limit specified by it and the borrower shall keep place additional collateral security within the time-limit prescribed by the bank or financial institution.
(3) In cases where a borrower fails to keep more assets as collateral within the time limit pursuant to Sub-Section (2) or the principal and interests thereon could not be recovered from the collateral security so mortgaged, the bank or financial institution may recover its principal and interests from the other movable or immovable property of the borrower according to the prevailing laws.
(4) In cases where any balance has remained after deducting the amount spent in connection with an auction or otherwise during the recovery of the principal, interest thereon or amount of damage, such balance shall be refunded to the concerned borrower
upon deduction of the principal, interest and the amount of damage payable to the bank or financial institution.
(5) Banks or financial institutions shall write to the concerned office to register or transfer of the ownership of the assets so auctioned as per this Section in the name of the person accepting the auction in accordance with the prevailing laws.
(6) In cases where a bank or financial institution writes for registration or transfer the ownership of the assets pursuant to Sub-Section (5), notwithstanding anything contained in the prevailing laws, the concerned office shall register or transfer the ownership of the assets as requested in the name of the person who accept such an action.
(7) In cases where no one accepts the movable or immovable assets in the course of carrying out auction by a bank or financial institution pursuant to this Section, a bank or financial institution may take the ownership of such assets as prescribed in its own name.
(8) A bank or financial institution that has taken the ownership of the asset in question in its own name pursuant to Sub-Section (7) shall request to the concerned office shall, In cases where such a request has been received notwithstanding anything contained in the prevailing laws, the concerned office shall register or transfer the ownership of the assets in the name of the concerned bank or financial institution.
(9) If the previous owner does not allow or obstruct the exercise of the possessory right over the property, accepted by any person or a bank or institution through auction, the concerned office of the Government of Nepal shall cause to be erased the possessory right over the property in question.
(10) No one shall not be entitled to hinder the recovery process of the credit written off by a licensed institution in accordance with the prevailing Credit Write-off Byelaws.
(11) In cases where a borrower does not repay the credit from a bank or financial institution and the interests accrued thereto and damage within the time limit stipulated in the deed of the credit or the contract, the bank or financial institution shall write to the Credit Information Center Limited to blacklist the borrower according to the prevailing laws.
(12) In cases where a credit could not be recovered even after taking actions against the borrower under this Section, the bank or financial institution may, for the purpose of recovering such credit amount, take actions for the recovery of the credit according to the prevailing laws including freezing of any other assets of the borrower located in a foreign country if it is possible.
(13) In cases where a credit could not be recovered even after taking all actions under this Section, the concerned bank or financial institution may request the Rastra Bank for making the necessary arrangements to withhold or confiscate the passport of the concerned borrower and to deprive him of any particular services to be made available by the State. Upon receipt of such request, the Rastra Bank shall forward the request to the Government of Nepal for necessary actions along with its opinion.
(14) Nothing herein is deemed to prevent taking legal actions for any offence as per the prevailing laws on the ground that a bank or financial institution had taken action against a person in connection with the recovery of its credit.