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BAFIA FOR RBB Bank CLass
BAFIA FOR RBB Bank CLass
BAFIA
Authentication = 2074.1.10
Total Chapter= 14
Total section= 134
1. Objectives of BAFIA 2073
Objectives
• To make necessary legal provisions relating to the
establishment, operation, management, regulation
and inspection & supervision of banks and financial
institutions.
• to promote the trust of the general public in the
overall banking and financial system of the country,
• to provide quality and reliable banking and financial
intermediary services to the general public through
healthy competition among banks and financial
institutions,
• to minimize risks relating to the banking and
financial system ,
Cont……
• Boost and consolidate the economy of the
State of Nepal by liberalizing the banking and
financial sectors,
• To promote good governance in banking
sector
• To maintain financial stability of banking and
financial sectors
• to protect and promote the rights and
interests of depositors,
BAFIA 2063 repeal following banking
law
• Agriculture Development Bank Act 2024
• Commercial Bank Act 2031
• Finance Company Act 2042
• Nepal Industrial Development Corporation Act
2046
• Development Bank Act 2052 and integrated micro
financial institutions.
Ans:
Chapter 11 and chapter 12 of BAFIA 2073
a) Voluntary Winding Up (Liquidation):
sec. 75 and 76
b)Compulsory Liquidation:
Condition to compulsory liquidation: (sec 79)
Ans:
Sec 99 subsection (1) and (3)
Provision for Regulatory Punishment by NRB
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.
(g) Suspend and revoked the banking license.
Punishment for Individuals(directors, position
holder and employees)
(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 position.
(d) 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
What are the conditions where Rastra Bank may suspend or revoke a
license to carry out banking or financial transactions issued to a bank
or financial ?
Ans: form Sec. 99(2)
(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.
BAFIA 2073- Corporate Good Governance
Factors Provisions
Transparency Auditing(Auditor, Audit committee
Reporting of transaction
Report publication