(1) If any foreign bank or financial institution intends to open its office in the State of Nepal, it shall make an application to the Rastra Bank, along with the fee and details as prescribed by the Rastra Bank.
(2) Notwithstanding anything contained elsewhere in this Act, also taking into account the existing competition in the banking sector, contribution that the foreign bank or financial institution can make to the banking development of the State of Nepal and the prestige and reputation of the concerned foreign bank or financial institution, the Rastra Bank may, on receipt of an application under Sub-section (1), issue a license to such foreign bank or financial institution to establish its office and carry on the financial transactions in the State of Nepal.
(3) While issuing a license pursuant Sub-section (2), the Rastra Bank may prescribe necessary conditions, and it shall be the duty of the concerned foreign bank or financial institution to comply with the conditions so prescribed.
(4) The provisions of this Act shall be applicable to the foreign banks or financial institutions, which are incorporated by obtaining the license pursuant to Sub-section (2), in relation to the financial transactions. Provided that the functions and activities of a representative or liaison office of a foreign bank or financial institution shall be as prescribed by the Rastra Bank.
(5) No foreign bank or financial institution which has obtained approval to open its office and carry on the financial transactions in the State of Nepal pursuant to this Section shall be granted approval to open another bank or financial institution in joint venture in the State of Nepal.