Provisions Relating to Supply and Recovery of Credits
56. Credit to be supplied :
(1) A licensed institution shall supply credit as prescribed by the Rastra Bank, subject to the directives given by the Rastra Bank and the credit policy determined by the Board.
(2) While supplying credit, a licensed institution shall obtain any movable or immovable property acceptable to it as a security or an appropriate guarantee in a manner to safeguard its interests.
(3) A licensed institution shall write to the concerned office to so withhold any property which it has taken up as the security against a credit pursuant to this Section that such property cannot be registered in the name of or transferred to any person in any manner whatsoever.
(4) When requested by a licensed institution to withhold registration or transmission pursuant to Sub-section (3), the concerned office shall withhold the registration or transmission thereof.
(5) The Rastra Bank may give necessary directive to the licensed institution to disburse credits for such class and in such area as prioritized for the economic upliftment of the persons belonging to a low-income and indigent class and of the inhabitants residing in any specific geographical region.
57. Provisions relating to recovery of credit :
(1) If any person, firm, company or institution fails to abide by the terms of the credit agreement or any terms and covenants made with a licensed institution or fails to repay credit to the licensed institution within the time-limit stipulated in the deed, or if the licensed institution finds through investigations that the borrower has not used the credit amount for the purpose for which it has been supplied or has misappropriated or misused it, the licensed institution may, notwithstanding anything contained in the concerned deed or in the laws in force, recover its principal and interest by auctioning or otherwise disposing of any property pledged to it, or any collateral or security deposited with it, by the borrower.
(2) If a person, firm, company or institution borrowing credit relinquishes in any manner the title to the property pledged to the licensed institution as a collateral or security or if the value of such collateral or security declines for any other reason, the licensed institution may, notwithstanding anything contained in the laws in
force, ask the concerned person, firm, company or institution to furnish additional collateral or security within a period as prescribed by it. If the concerned person, firm, company or institution fails to furnish additional collateral or security within the time-limit prescribed by the licensed institution or if the principal and interest cannot be recovered from the collateral or security pledged, the licensed institution may, in accordance with the laws in force, recover its principal and interest from any other movable and immovable property owned by the borrower or to which the borrower has title.
(3) The amount of principal and interest due to the licensed institution and the expenses incurred in auction or other disposal of a property made pursuant to this Section shall be deducted from the proceeds of such auction or disposal, and the balance, if any, shall be refunded to the concerned person, firm, company or institution.
(4) The licensed institution shall write to the concerned office for registration or transmission of the assets auctioned by it pursuant to this Section in the name of the person who has taken over it on such auction in accordance with the laws in force.
(5) When so requested by the licensed institution for registration or transmission pursuant to Sub-section (4), the concerned office shall make registration or transmission notwithstanding anything contained in the laws in force.
(6) If no one offers a bid in an auction sale, by a licensed institution under this Section, of the movable and immovable property pledged as the collateral or security, the licensed institution shall take over the ownership of such property as prescribed.
(7) The licensed institution shall write to the concerned office for registration or transmission of the property of which ownership has been taken over by such institution pursuant to Sub-section in its name. When so requested, the concerned office shall make registration or transmission of such property in the name of such licensed institution notwithstanding anything contained in the laws in force.
(8) If the previous owner of the property taken over by a licensed institution or any person in an auction refuses to allow its possession and use and the licensed institution or that person requests to have the same available for possession and use according to the laws in force, the appropriate body of the Government of Nepal shall render necessary assistance.
(9) No licensed institution shall hold up action for the recovery of credit which has not been written off pursuant to Clause (dd) of Sub-section (1) of, Clause (aa) of Sub-section (2) of, Clause (e) of Sub-section (3) of, and Clause (l) of Sub-section (4) of, Section
47.If any person, firm, company or institution has failed to repay the credit borrowed from a licensed institution within the repayment period of the credit deed, and while taking action pursuant to this Section for the recovery of such credit, the licensed institution concerned shall write to the Credit Information Center Limited to
include such person, firm, company or institution in the black list in accordance with the laws in force.
(11) If a credit cannot be recovered even while taking action for the recovery of such credit against any person, firm, company or institution pursuant to this Section, the licensed institution concerned may, for the purpose of recovering such credit also from any other
property of the borrowing person, firm, company or institution situated abroad, institute action for the recovery of credit including the withholding of property in accordance with the laws in force.
(12) If a credit cannot be recovered even upon taking all actions on recovery of credit pursuant to Clause s (1) to (8), the licensed institution may make a request to the Rastra Bank for necessary provision to withhold and seize the passport of the borrower person and to deprive such borrower from any facilities to be provided by the State. On receipt of such request, the Rastra Bank shall forward the matter, accompanied by its opinion, to the Government of Nepal for necessary action