Establishment, Objectives and Functions, Duties and Powers
Objectives of the Bank:
The objectives of the Bank shall be as follows:-
To develop and manage the necessary monetary and foreign exchange policies in order to maintain price stability and balance of payment stability for economic stability and sustainable economic development.
Increase access to financial services and public trust in the banking and financial system by maintaining the stability of the banking and financial sectors;
To develop a secure, healthy, and efficient payment system;
Functions, Duties and Powers of the Bank:
In order to achieve the objectives, the functions, duties and powers of the Bank shall be as follows:
To print banknotes and coins
Formulating necessary monetary policies to maintain price stability and implementing or causing them to be implemented;
To develop foreign exchange policies and then implement or cause them to be implemented:
To determine the foreign exchange rate system;
Managing and operating the foreign exchange reserve;
To grant commercial banks and financial institutions licences to conduct banking and financial transactions, as well as to regulate, inspect, supervise, and monitor such transactions:
To act as the Government of Nepal's banker, advisor, and financial agent;
To serve as the banker for commercial banks and financial institutions, as well as the lender of last resort;
To establish and promote a payment, clearing, and settlement system, as well as to regulate these activities.
To conduct open market transactions using the tools required for liquidity management,
To carry out or cause the carrying out of any other necessary functions that the Bank is required to carry out in order to achieve the Bank's objectives under this Act;
The Bank shall have the authority to carry out other functions and take actions incidental to this Act or any other prevailing law while exercising the powers conferred by this Act or any other prevailing law.
No one shall abuse the powers granted to the Bank by this Act.
Prior Right of the Bank:
For the purpose of recovering any loan made by the Bank to any borrower or any other type of claim made by the Bank against any borrower, the Bank shall have prior night of security over cash deposited in an account in the name of such borrower at the Bank or in any commercial bank or financial institution, or against any other movable and immovable property owned by the borrower.
The Bank shall recover its loan by seizing any cash or movable or immovable property in its possession and selling it in the manner prescribed.
Functions not to be carried out by the Bank:
Unless otherwise specified in this Act, the Bank shall not perform the following functions:
Making any type of loan, accepting any type of deposit, or making any kind of financial gift.
Acquiring any type of proprietary right in any financial, commercial, agricultural, industrial, or other institution; purchasing shares of any commercial bank, financial institution, public corporation, or company;
Performing any type of trade; and
Acquiring ownership of movable and immovable property through purchase, lease, or any other means. Provided, however, that the Bank may acquire property as needed to carry out its functions or achieve its objectives.
However, the Bank may perform the following functions: -
To lend to and invest in the shares of institutions that carry out functions that help the Bank carry out its functions or achieve its goals, up to ten percent of the total capital of such institutions.
Explanation: For the purpose of this Clause, "institutions which carry out the functions which are helpful in carrying out the functions of the Bank or in attaining its objectives" means any institutions, companies which are exclusively engaged in evaluating, managing, protecting the security, restructuring and transferring the securities of commercial banks or of financial institutions carry out the function of credit rating, exchange of credit information, process and
To lend money to its own employees.
Privileges and Facilities to the Bank:
Regardless of what is stated in the applicable laws, the Bank shall be entitled to the following privileges and facilities:
Exemption from all types of taxes, fees, and charges on income, capital transactions, houses, land, and assets, among other things.
There is no requirement to pay a registration fee for the Bank's loan or refinance deeds to be registered.
There is no requirement for revenue stamps on any of the Bank's documents:
There would be no tax, fee, charge, or duty on the export and import of bank notes, coins, gold, silver, and the paper, metal, chemicals, and other materials used in the printing and minting of bank notes and coins.
International Cooperation and Relationship:
The Bank shall represent Nepal in international organizations and associations on matters within the Bank's jurisdiction, such as monetary policy. Foreign exchange policy, the balance of payments, bank supervision, and other related issues are all addressed.
Through international monetary cooperation, the Bank will participate in international organizations or associations that promote financial and economic stability.
While participating in international organizations or associations as a representative of Nepal, the Bank shall assume responsibility and undertake the functions to be carried out on the country's behalf.
