Rastral Bank Sets Capital and Fee for Foreign Banks and Financial Institutions
New Regulations for Foreign Banks and Financial Institutions in Nepal
The Rastral Bank of Nepal has introduced new regulations for foreign banks and financial institutions seeking to operate in the country. The regulations aim to ensure that these institutions comply with the necessary requirements before obtaining prior approval from the bank.
Requirements for Prior Approval
To obtain prior approval, foreign banks and financial institutions must submit certain documents and details to the Rastral Bank. These include:
- Written commitment from their board of directors stating that they will make available funds necessary to fulfill their liabilities related to business activities in Nepal
- Details about the location of their proposed branch office
- Information about possible office bearers
The Rastral Bank may demand additional documents or details while carrying out an inquiry into the submitted documents and details.
Approval Process
The Rastral Bank may grant prior approval for a foreign bank or financial institution to open a branch office in Nepal within 120 days of filing the application. Once approved, the foreign bank or financial institution must register its branch office according to prevailing laws relating to companies.
Additionally, the branch office must submit an application to the Rastral Bank along with required documents and details, as well as pay a prescribed fee for approval to carry out banking and financial transactions in Nepal.
Terms and Conditions
The Rastral Bank may prescribe necessary terms and conditions while granting approval. The bank may also grant approval within 90 days of filing the application.
Circumstances for Denial of Approval
The Rastral Bank may deny prior approval for incorporation of a bank or financial institution or opening a branch office of a foreign bank or financial institution in certain circumstances, including:
- If the name or banking and financial transaction is not found to be appropriate from the point of view of public interests, religion, ethnicity, or traditional belief
Future Policies
The regulations also specify that the Rastral Bank may frame necessary policies from time to time regarding opening of branch offices outside of Nepal.