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Chapter – 11

Chapter – 11

Offences, Punishment and Proceedings

95. Acts to be Deemed to be Offence Under  this Act :

(1) Whoever accepts deposits or gives credits or issues debenture or other financial instruments in contravention to this Act or the Rules or bye-law framed there under or an order or directive issued there under; or whoever charges or gives interest against the policy determined by the Bank or issues fake, fraudulent, counterfeit or duplicate or copied currency or distributes or circulates such currency or is involved in such acts, it shall be deemed to have committed offences under this Act.
(2) Except otherwise provided under Sub-section (1) any person who fail to comply with the provisions made under this Act or rules made thereunder, or bye-laws, or the order or directives issued thereunder, shall commit offence under this Act.

96. Punishment :

(1) The person convicted of offence referred to in Section 95 shall have the assets related to the offence confiscated and shall be liable to a fine up to three times of the value of the said assets or an imprisonment up to three years or the both.
(2) In cases where the value of the assets related to offence can not be ascertained pursuant to Sub-section (1), a fine of up to one million rupees or an imprisonment up to three years or both may be imposed depending upon degree of the offence.
(3) If the offence referred to in Section 95 has been committed by any firm, company or institution, the punishment referred to in Sub- Sections (1) and (2) shall be imposed on the official of the said firm, company or institution committing the offence.
(4) The person who has attempted to commit, or who is indirectly related to the offence referred to in Section 95 or the person who has helped to commit such offence or the official of the concerned firm, company or organization who has helped to commit such offence shall be liable to a punishment up to the half of the punishment prescribed for the offender of the first degree.

97. Government of Nepal to be Plaintiff :

The cases relating to the offences referred to in Section 95 shall be filed by Government of Nepal as plaintiff and such cases shall be deemed to have been incorporated in Schedule -1 of the Government Cases Act, 2049 (1992).

98. Bank to Provide Information : In cases where the Bank has an information from any source that any one has committed the offences referred to in Section 95, the Bank shall forward such information in writing to Government of Nepal or the concerned agency for necessary actions.

99. Fine for Violation of Bank’s Regulation :

(1) In case any commercial bank or financial institution licensed under this Act, violates an order or directive issued by the Bank under this Act or under the regulation or Bye- laws framed thereunder, the Bank may fine such commercial bank or financial institution an amount up to the amount related to such violation.
(2) In cases where the Bank’s regulation referred to in Sub-section
(1) has been violated by a Director, official or employee of the commercial bank or financial institution, such fine shall be imposed on the concerned Director, official or employee.

100. Punishment for Violation of Bank’s Regulation :

(1) In case any commercial bank or financial institution licensed from the Bank, violates an order or directive issued by the Bank under this Act or under the regulation or bye-laws framed thereunder, the Bank may impose one or more of the following punishment to such commercial bank or financial institution:-
(a) Giving reprimand or written warning;
(b) Obtain an undertaking from Board of Directors for adopting reformative measures;
(c) Issuing written order to end up frequent violations, to abstain from such violation and to adopt reformative measures;
(d) Suspend or terminate the services of the Bank’s employee;
(e) Prohibit commercial bank or financial institution to distribute dividend to its shareholders;
(f) Prohibit commercial bank or financial institution to accept deposits or to grant loan and advance;
(g) Imposing full or partial restriction on the transaction of business of the commercial bank or financial institution;
(h) Suspend or revoke license of the commercial bank or financial institution.
(2) Where a Director or official or employee of a licensed commercial bank or financial institution violates an order or directive issued by the Bank under this Act or under the regulation or bye-law framed thereunder or in cases where, they have acted against the interest of the depositor or general public or where they failed to submit the documents, particulars, data required by the Bank or the inspecting or supervising official within the time prescribed, the Bank may impose the
following punishments to such Director, official or employee:-
(a) Giving reprimand or written admonition;
(b) Suspending;
(c) Imposing a cash fine not exceeding five hundred thousand rupees;
(d) Giving order to the Board of Directors of concerned commercial bank or financial institution to stop payment of all benefits including remuneration and
allowances;
(e) Giving order to the Board of Directors of the concerned commercial bank or financial institution to remove Directors from his office of Director or to terminate the services of officer or employee.

101. Procedures for Pecuniary Penalty and Punishment :

(1) While imposing pecuniary penalty or punishment pursuant to Sections 99 and 100, the Bank shall have to follow the following procedures:-
(a) Prior to imposing pecuniary penalty or punishment, the Bank shall issue a written notice to the accused institutions or persons stipulating the following
matters to submit its reply within fifteen days, on the proposed fine or punishment:-
(1) Nature of the offense,
(2) Amount of fine or proposed punishment that may be imposed on the basis of nature of offence, and
(3) Summary of the facts related to the offence.
(b) The institution or person accused pursuant to Clause
(a) should submit written replies within fifteen days accepting or denying the charges.
(c) In case the denial of the charge by the accused institution or person is found to be satisfactory, the Bank may change, limit or dismiss such charge.
(d) In case the accused institution or person accept the charge or does not give satisfactory replies, the Bank shall impose such fine or punishment.
(e) The Bank may issue order to deduct the amount of fine imposed pursuant to Clause (d) from the accounts of the concerned commercial bank or financial institution maintained at the Bank.
(2) The cash fine to be recovered by the Bank pursuant to Clause (e) of Sub-Section (1) shall be deposited in the general reserve fund.
(3) Notwithstanding anything contained in Sub-section (1), there is no need to follow such procedure while imposing punishment under Clauses (a), (b), (c) or (d) of Sub-section (1) and Clauses (a) and (b) of Sub-section (2) of Section 100.

102. Filing Appeals : The commercial bank or financial institution or the director or official or employee thereof not satisfying with the punishment imposed by the Bank under Sections 99 and 100 may, within thirty five days from the date of punishment, file an appeal at the Appellate Court.

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