Nepal Rastra Bank : All about Nepal Rastra Bank Act 2058

Nepal Rastra Bank is a central Bank of Nepal. It has authority to all about the banking sector. Nepal
Rastra Bank Forex or Nepal Rastra Bank Exchange Rate service are provided by the NRB. Regulation of
Bank are not only the function of Nepal Rastra Bank. NRb is the short form of Nepal Rastra Bank. It is
also known as bank of government.

Nepal Rastra Bank Act, 2012 is amended and replaced by Nepal Rastra Bank Act, 2058. This act is formed
to provide legal right to the Nepal Rastra Bank to act as the Central Bank of Nepal. There are basically 12
chapters and112 sections, the itself was sanctioned by the King on 2058-10-17.

Building of Nepal Rastra Bank

Nepal Rastra Bank Act, 2058, clarifies the objective, function, responsibility, authority and preference of
the bank. It also clarifies the function that that is prohibited to this bank, facility and relationship with
the Government of Nepal. In addition, the coordination and relationship with public and international
organizations and communication and operation of account are also determined. This act has elucidated
about monetary function of tifies the statutory ratio to be maintained by all banks and financial
institutions. In addition, penalty, open market operation, loan, re-loan, discount and interest to banks are
also explained.

Adequate provisions are made in this act of proper management of foreign currencies. The chapter
describes various policies and regulations regarding foreign exchange, for reserves, gold and debentures,
international clearing and payment contract.

Regarding regulation, supervision and monitoring of banks, this act has made different provisions. As the
central bank of Nepal, Nepal Rastra Bank has to regulate all commercial banks and institutions affiliated
to it. They are essential for implementation of monetary policy and credit control. For the faceguard of
public wealth deposited into bank, the bank regularly supervises and monitors banks. For the expansion
and development of banking within the country, the bank grants authority for establishment of a bank,
deposit collection, advance loan etc.

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Any action opposing this law is unforgivable. So if any authority breaks the law and regulation, the
defaulter is charged and immediate action is taken. If necessary, penalty is given to the party; the
defaulter can re-apply for justice to the high court if it feels to be suffered from business and injustice.

This Nepal Rastra Bank act 2058 includes the following chapters:

1. Chapter 1 Preliminary: defines language within the act;

2. Chapter 2 Establishment of the Bank, Objectives and Functions, and Duties and Powers;

3. Chapter 3 Formation and Function of the Board, and Duties and Powers;

4. Chapter 4 Financial Provisions;

5. Chapter 5 Monetary Functions and Operation of Open Market;

6. Chapter 6 Monetary Unit, Banknote, and Coins;

7. Chapter 7 Foreign Exchange Policy, Regulation, and Reserve;

8. Chapter 8 Relation with the Government of Nepal;

9. Chapter 9 Regulation, Inspection, and Supervision of the Banks;

10. Chapter 10 Balance Sheet, Auditing, and Report;

11. Chapter 11 Offenses, Punishment, and Proceedings; and

12. Chapter 12 Miscellaneous: addresses payment, clearing and settlement, collection of data, trust
accounts, bylaws, and other matters related to the powers of the Central Bank.

New NRB Act will Increase Financial Thrive and Stability'

Published on: 2017-01-03 639 times read 0 Comments

January 3: Nepal Rastra Bank (NRB) has implemented Nepal Rastra Bank Act 2073 in a bid to make Nepali
banks and financial institutions (BFIs) disciplined, transparent and up-to-date. The NRB Act 2073 which
was endorsed by Parliament came into effect after verification from the President on November 14. The
new Nepal Rastra Bank Act 2073 has been brought by terminating and modifying several mechanisms of
the erstwhile Act and adding six new mechanisms. NRB claims that the new Act will further strengthen
the BFIs.

"The preface of NRB Act 2058 has been amended and made vast," said Ram Hari Neupane, NRB Director,
Legal Division. According to him, the amended Act has already come into effect."NRB can now mobilise
various financial and monetary tools as per the requirement in order to manage liquidity of the market,"
he added, "Previously, there were limited tools for liquidity management." The new Act has stressed on
expansion of financial accessibility by strengthening the financial system through effective supervision
and regulation of the BFIs.

As per the amended Act, the capital of NRB has raised to Rs 5 billion from Rs 1 billion. The Act has given
authority to NRB of conducting pre-liquidation process of BFIs under liquidation mechanism. Experts
believe that the successful execution of the new Act will increase financial thrive and stability in the
country.