Chapter-11 Voluntary Liquidation of Banks or Financial InstitutionsEditor NLC
75. Voluntary Liquidation of Bank or Financial Institution: (1) Any bank or financial institution wishing to go for voluntary liquidation shall submit an application along with an action plan of voluntary liquidation.
2. In cases where the Rastra Bank is confident, upon carrying out an inquiry into an application submitted pursuant to Sub-Section (1), that such bank or financial institution or a branch or office of a foreign bank or financial institution is fully capable of repaying all of its credits and liabilities, it may grant approval in principle, along with some terms and conditions, for voluntary liquidation.
3. A bank or financial institution getting approval in principle from the Rastra Bank pursuant to Sub-Section (2) shall carry out the following functions:-
a. To inform the Office of the Companies Registrar that it has got an approval in principle within seven days from the date of getting such an approval;
b. To send notice to all depositors, creditors or concerned persons by fast, efficient and reliable means, about the approval in principle it got within thirty days from the date of getting such an approval;
c. To publish a notice in national newspapers that it has got an approval in principle within thirty days from the date of such approval
d. To perform other functions as specified by the Rastra Bank.
76. Initiation of Voluntary Liquidation :(1) The process of initiation of voluntary liquidation of a bank or financial institution shall be deemed to have been commenced from the date of granting the final approval for voluntary liquidation by the Rastra Bank.
2. A bank or financial institution that has got an approval in principle for voluntary liquidation pursuant to Section 75 shall fulfill the following conditions before getting final approval of voluntary liquidation from the Rastra Bank:-
a. That all the deposits and liabilities are refunded or fulfilled within the due date,
b. That operation of transactions are closed down and no new transaction to be carried out,
c. That exercise of other powers, except those essential for voluntary liquidation, shall not be allowed.
3. The Rastra Bank may issue the necessary directives in the course of carrying out functions pursuant to Sub-Section (2).
4. In cases where a person entitled to get payment of the amount and other liabilities pursuant to Clause (a) of Sub-Section (2) fails to come to receive the payment within the prescribed time-limit, the said amount shall be deposited to an account as directed by the Rastra Bank.
5. An approval of voluntary liquidation will not cause any type of adverse effect on the rights and interests of the depositors and other creditors.
(6) An bank or financial institution opting for voluntary liquidation shall, upon completion of the proceedings of this Act, submit to the Rastra Bank an auditing report of such a bank or financial institution.
7. The Rastra Bank shall grant final approval for voluntary liquidation to a bank or financial institution that performed the function as referred in this Section. The Rastra Bank shall revoke the license for carrying out banking and financial transaction of such a bank or financial institution.
8. The amounts to be paid by the bank or financial institution opting to go for voluntary liquidation for the deposits not claimed at the moment shall be separately set aside as directed by the Rastra Bank.
77. No Effect in Liability: There shall be no effect on the liability of any shareholder, Director, Chief Executive, office bearers, employees or other persons under to this Act or any other prevailing laws as a result of liquidation of any bank or financial institution under this Chapter.