Banks and Financial Institution Act, 2073 (Part-6)
Chapter-10: Provision relating to Merger & Acquisition
69. BFI can be Merged or Acquired
1. One BFI can be merged or get merged with another one or can acquire another one or can be acquired by another one subject to the procedures laid down in this Act or NRB Act.
2. “D” class FI can be merged or get merged or acquired with/by another FI of the same class. Provided that, IDB shall not be merged or get merged or acquired or get acquired with BFI.
3. Notwithstanding anything contained in this Chapter, if BFI is found to be in the following conditions as per the report of supervision, NRB, specifying the reason thereof, can issue an order to merge or be merged the assets, liabilities, and business of such concerned BFI with/by another BFI:-
a. Inadequate capital fund or the financial condition is being deteriorated in the last 3 years;
b. Acts done, against the interest of depositors or which harm the liability towards the depositors, or such situation still exists;
c. Where it is necessary, to enhance the national and international competitiveness for financial stability, development, and promotion.
4. Notwithstanding anything contained in this Chapter, if BFI is found to be in the following conditions as per the report of supervision, NRB, specifying the reason thereof, can issue an order to merge or be merged the assets, liabilities, and business of such concerned BFI with/by another BFI:-
a. More than one banks or FIs of persons of the same group, firm, or company are in operation causing unhealthy financial relation;
b. BFI if operated in the existing situation, the interest of depositors, public shareholders, and other customers cannot be protected;
c. Licensed institutions are not able to pay off their liabilities due to continuous increase in systematic risk;
d. Shares of the public group is not issued within a specified time, issued shares are not subscribed or minimum proportionate issued capital as specified has not been met;
e. Immediate reformative action has been taken against the BFI 3 or more times or the
governance of the licensed institution has weakened due to continuous conflict in the BOD.
5. While issuing an order under Sub-section (3) & (4), NRB may specify the procedures for merger & acquisition.
70. Application to be made for Merger & Acquisition
1. If any licensed institution wishes to be merged with or merging another licensed institution, both the merging and merged licensed institutions shall adopt a special resolution to that effect in their respective board meetings and make a joint application, setting out the following matters, to NRB for pre-approval:-
a. Necessity and justification of merger of banks or FIs, general prospection of effects that would yield in banking or financial sectors and financial system;
b. Audit report containing the audited balance sheet, P&L A/c, cash flow statement, net worth statement of previous FY of merging & merged banks or FIs;
c. Provision of safekeeping of interest of creditors of both merging & merged licensed institutions;
d. Valuation of the movable and immovable properties of, and actual details of the assets and liabilities of, the merging licensed institution;
e. Report on the management of employees of both merging and merged licensed institutions;
f. Copy of approval for the merger as per the prevailing company & securities law;
g. Preliminary agreement between merging and merged licensed institutions about the merger;
h. Any other particulars prescribed by NRB.
2. In case any BFI is desirous of acquiring another BFI, concerning 2 or more banks or FIs shall adopt a special resolution to that effect in their respective board meetings and make a joint application, setting out the following matters, to NRB for pre-approval:-
a. Necessity and justification of acquisition of banks or FIs, general prospection of effects that would yield in banking or financial sectors and financial system;
b. Audit report containing the audited balance sheet, P&L A/c, cash flow statement, net worth statement of previous FY of acquiring institution and target institution(s);
c. report on the management of employees of both acquiring and target licensed institutions;
d. Copy of approval for acquisition as per the prevailing company & securities law;
e. Preliminary agreement between acquiring and target licensed institution(s) about the acquisition;
f. Any other particulars prescribed by NRB.
3. NRB shall examine and verify the application received according to Sub-section (1) & (2) and NRB can discuss the matters with the applicant and ask for additional documents also as per the necessity.
4. If NRB is satisfied, upon the examination and verification as per Sub-section (3), that the merger or acquisition would not result in any negative impact on the development of banking and the financial system of the country, healthy competition, and complying with prevailing laws, it may grant pre-approval and while issuing such pre-approval NRB may prescribe terms, conditions & directions.
71. Provision related to the Valuation of Assets & Liabilities
1. After obtaining pre-approval from NRB for merger & acquisition of banks & FIs according to Section 70, concerning banks & FIs shall appoint valuator, who’s among the person, firm, company or institution eligible to be appointed as an auditor of the banks or FIs, to evaluate the assets, liabilities, and business of banks or FIs and notify the NRB about the same. However, banks or FIs can conduct the valuation even before applying for pre-approval from NRB.
2. After obtaining pre-approval from NRB for merger and acquisition u/s 70, banks or FIs shall conduct the valuation of the assets, liabilities & business by the auditor appointed by GM or BOD if delegated by GM.
3. Acquirer institutions can conduct the detailed valuation of assets and liabilities of the target institution.
4. NRB can order banks or FIs to appoint another valuator, in case the work done by the evaluator appointed under Sub-section (1) & (2) is found to be unreliable.
5. Remuneration and other benefits of the evaluator shall be as decided by the banks or FIs concerned.
6. Valuator shall conduct the valuation of assets, liabilities, net worth, and business as per the established valuation standards, basis, procedure, and policy.
7. NRB can give necessary direction about the procedure of valuation, basis of valuation, and scope of valuation.
72. Provision related to Agreement
Except otherwise ordered by NRB, banks, or FIs who’ve obtained pre-approval for merger and the acquisition shall enter into an agreement for merger & acquisition specifying the following matters:-
a. Provision related to the safeguarding of interest of depositors, creditors & shareholders;
b. Provision related to the method of valuation of assets and liabilities of banks or FIs and adjustment thereon;
c. Management of investment and transaction, interbank transaction and cross-holding, details of guarantee, management of Non-Banking Assets (NBA), management of assets and liabilities;
d. Details of the process, time and cost to be incurred in merger or acquisitions;
e. Management and organizational structure and list of name of directors;
f. Provision related to the management of employees, in respect of designation, remuneration, and other benefits, of merging banks & FIs or acquirer and target banks or BFIs;
g. Details of shareholders having substantial holding and other shareholders;
h. In case a new BFI is to be formed after the merger, name, MOA, AOA, capital structure, restructure, and a class of such new institution;
i. In case of foreign BFI, copy of approval from the regulatory authority of such foreign BFI;
j. In case of foreign BFI, details of the business of BFI situated in Nepal that is going to be acquired or whole of the business of such BFI to be sold;
k. Grievance management system of grievance of concerned;
l. Process that is going to be initiated to comply with the prevailing law;
m. Any other necessary matters specified by NRB.
73. Provision related to Approval
1. Banks or FIs who’s obtained pre-approval from NRB shall, at the respective GM, pass a special resolution for the same and apply jointly along with the agreement u/s 72 to NRB for final approval.
2. Upon examination and verification of the application received under Sub-section (1) if NRB deems it necessary to call for additional information or document, NRB can call for such additional information & document.
3. Upon the examination and verification as per Sub-section (1) & (2), NRB can give the final approval for the merger or acquisition of banks or FIs prescribing any terms or conditions thereon, after ensuring a healthy competitive environment in the financial sector due to merger or acquisition, creation of a monopoly or controlled practice in banking or financial sector or not and overall banking & financial structure, overall adverse impact on financial market and depositors and fit & proper test of the promoter having a substantial holding in an institution after a Merger or Acquisition.
4. NRB shall, within 45 days, inform the concerned banks or FIs about the non-suitability of merger or acquisition specifying the reason thereof.
5. NRB can waive as specified, to the approved institutions under Sub-section (3), the directions as per this Act or given by NRB, if the compliance of such is difficult due to merger or acquisition, as per the necessity and justification.
6. Other provisions related to merger or acquisition shall be as specified by NRB.
74. Acquisition of Transaction
Subject to the pre-approval of NRB, any branch or any assets or business of BFI can be transferred to or from any other BFI upon mutual agreement.
Chapter-11: Provision relating to Voluntary Cancellation of BFI
75. Voluntary Cancellation of BFI
1. BFI desirous of voluntary cancellation shall apply to NRB along with the detailed action plan of voluntary cancellation.
2. NRB can grant pre-approval for voluntary cancellation, if it is satisfied, upon the verification of an application under Sub-section (1), that the BFI or branch or office of foreign BFI can meet its debt obligation & liabilities in full, subject to terms and conditions.
3. Banks or FIs obtaining pre-approval under Sub-section (2) shall do the following acts:-
a. Registering information of pre-approval with company registrar within 7 days of pre-approval;
b. Conveying the information of pre-approval to all the depositors, creditors, and concerned persons via fast and reliable medium possible within 30 days of pre-approval;
c. Publishing the information of pre-approval within 30 days of pre-approval in national daily;
d. Any other acts specified by NRB.
76. Initiation of Voluntary Cancellation
1. Voluntary cancellation of BFI shall be deemed to be started from the date of final approval from NRB.
2. BFI obtaining pre-approval from NRB u/s 75 shall complete the following acts before applying for final approval:-
a. All deposits and liabilities shall have to be repaid or settled within the prescribed time period;
b. Business transaction shall be ceased to carry on and no new transactions are to be entered;
c. No other powers, except necessary for voluntary cancellation, shall be exercised.
3. NRB can issue necessary direction while performing acts under Sub-section (2).
4. In case the payee doesn’t come forward to receive the payment under Sub-section (2)(a) within the time prescribed, such unpaid amount shall be kept on a separate account as per the direction of NRB.
5. There shall be no adverse effect on the interest of any depositors or creditors of BFI due to preapproval for voluntary cancellation of such BFI.
6. After the end of the procedure for voluntary cancellation of BFI as per this Act, an Audit Report on such shall be submitted to NRB by concerned BFI;
7. NRB shall grant final approval to BFI complying with this Section. NRB shall cancel the license issued for carrying on banking and financial transaction.
8. The amount of deposit immediately unclaimed shall be kept separately as per the direction of NRB by the BFI which’s undergone voluntary cancellation.
77. No effect on Liability
There shall be no effect on the liability of, at the event of voluntary cancellation of BFI under this Chapter, concerned BFI, its shareholders, directors, CEO, Executives, employees, or any other person under this Act or any other prevailing law.
Chapter-12: Provision relating to Compulsory Cancellation of BFI
78. Application can be made to the Court for Compulsory Cancellation of BFI
1. NRB under this Chapter can apply to the court to initiate the compulsory cancellation of any BFI and notice of such application shall be published in a national daily.
2. Along with the application for compulsory cancellation of BFI under Sub-section (1), NRB shall attach the following documents:-
a. Details of Situations for compulsory cancellation of BFI u/s 79 along with reason thereof; and
b. Financial statement of BFI concerned.
3. Notwithstanding anything contained in Sub-section (1), any of the following persons can, after obtaining prior approval from NRB, apply to the court for compulsory cancellation of BFI based on the situation mentioned in Section 79:-
a. Person, not receiving the payment of matured deposit, representing 25% or more deposit or joint application by 1% or more depositors; or
b. Person eligible to apply for compulsory cancellation under prevailing Insolvency law.
4. The procedure of compulsory cancellation shall be started from the date of order of the court for compulsory cancellation based on an application under Sub-section (1) or (3).
79. Situation for Compulsory Cancellation of BFI
In the following situations BFI can be compulsorily canceled:-
a. On the failure of payment of matured or call deposit or financial liability within a predetermined time period;
b. Negative Capital fund of BFI;
c. NRB has recommended for compulsory cancellation of BFI based on the Supervision Report of such BFI;
d. Any acts found to be conducted against the interest of depositors and, of obstruction on the development of the financial system by the shareholder or executive having substantial interest;
e. Repetitive non-compliance with this Act or any direction given by NRB;
f. Any other bases for compulsory cancellation of bank or FY as per NRB are present.
80. Suspension of Transaction
1. NRB shall give an order for suspension of all financial transactions of BFI after applying to the court for compulsory cancellation of such BFI u/s 78.
2. While giving an order for suspension under Sub-section (1), NRB can cancel the license.
81. Appointment of Liquidator
1. Court, to initiate the compulsory cancellation of BFI, can order NRB to recommend for the appointment of liquidator.
2. If the court gives an order under Sub-section (1), NRB shall, within 15 days, recommend the name of at least 3 persons for the appointment of liquidators.
3. NRB, while recommending the liquidator under Sub-section (2), shall recommend the persons having experience in the banking or financial sector among the person holding a license to carry on insolvency proceeding.
4. Court can appoint one person among the 3 persons recommended under Sub-section (2).
5. After the appointment of a liquidator under Sub-section (4), the BOD of such BFI shall be deemed to be automatically dissolved and unless otherwise ordered by the liquidator the service of employees of such BFI shall come to an end.
6. NRB shall apply to the court for the removal of the liquidator and appointment of another liquidator in case the liquidator appointed under Sub-section (4) resigns, dies or NRB is satisfied that liquidator is unable to discharge his duty.
82. Function, Duty & Power of Liquidator
1. Liquidator, after being appointed for initiation of proceedings for compulsory cancellation of BFI, shall discharge the following functions:-
a. Publishing notice, for the information of shareholders and stakeholders of BFI, in English & Nepali national daily within 15 days of appointment;
b. Sending the information accompanying with the certified copy of the order for compulsory cancellation to the office of company registrar and institution formed under prevailing law to secure the deposit within 15 days of appointment;
c. Attaching or causing to be attached the notice of such order at the principal place of business of BFI and at every office of such BFI for the information of the public;
d. Broadcasting the information via at least one national TV and one national Radio at least once a week for a continuous period of 4 weeks after the appointment;
e. Other functions as prescribed by NRB.
2. After receiving information under Sub-section (1)(b), the office of the company registrar shall enter in the record book of such BFI regarding the initiation of compulsory cancellation.
3. Liquidator, being under the direction of NRB, shall have the following functions, duties, and powers in addition to functions, duties, and powers mentioned anywhere in this Act:-
a. Assuming responsibility of the office of BFI, books of accounts, accounts, records & assets;
b. Performing necessary regular functions for the management and operation of BFI;
c. Performing or causing to be performed all the functions in the name or on behalf of the BFI;
d. Appointment of employees to assist in discharging his/her duty;
e. Making necessary expenses for the operation, management & cancellation of BFI;
f. Coordinating, to secure the deposit, with the institution established under the prevailing law;
g. Using all the powers vested upon with the shareholders, general meeting, BOD & officers of the BFI;
h. Examination of business and financial situation of BFI;
i. Complete or partial merger or transfer of assets and liabilities of BFI to another BFI after obtaining approval from NRB;
j. Obtaining credit against the security of assets of BFI;
k. In case there seems to be a situation of profit on the sale of assets or end of liability or agreement, selling such assets or ending such liability or agreement;
l. Availing the service of a qualified person as per necessity for assisting in discharging his/her functions;
m. Conducting discussion and reaching an understanding with the creditors or borrowers of BFI;
n. Collecting, insuring, selling, and distributing as per this Act the assets of BFI;
o. Verifying whether or not any director, officer, employees or any person has committed forgery, fraud, or misleading act against BFI or depositors or creditors and initiating necessary legal actions against such person or instituting or defending any legal action on behalf of BFI;
p. Repossessing the assets of BFI in case it has been used by any person or initiating legal action
for repossession of such assets or taking back the money involved in any void transaction;
q. Submitting the report, prepared on the progress of cancellation as per the format as prescribed by NRB, to the court and NRB;
r. Doing or causing to be done all necessary acts for the cancellation of BFI;
s. Doing any other acts as prescribed by NRB.
4. Liquidator can apply to the court for releasing the obstruction, in case any obstruction has arisen while using the powers and discharging the functions as per this Chapter;
5. Court can give appropriate order in case of reason in the application under Sub-section (4) seems appropriate.
83. Effect of Order of Cancellation
1. Upon the issuance of an order of cancellation of BFI by the court, there shall be the following effects on the following matters:-
a. Automatic extension of the limitation period, in the case time period of any right or claim of BFI, has been expired as per prevailing law, up to 6 months from the date of order of initiation of cancellation of such BFI;
b. Except in the situation mentioned in Clause (c), assets or properties of BFI mortgaged by any means or BFI has availed credit against the security of such shall automatically be released;
c. Function of accepting deposit and extending credit of BFI shall automatically be ceased;
d. Any legal proceedings pending against BFI shall automatically be suspended and except court has ordered otherwise, no legal action against such BFI can be revived; Provided NRB shall have to apply to the Supreme Court in case of any case against such BFI is pending before it or it is necessary to obtain clearance from the Supreme Court.
e. No interest or extra fee shall be levied on the liability of BFI;
f. Shares of such BFI shall not be transferred, pledged, or canceled;
However, shares of such BFI can be transferred, pledged, or canceled after obtaining prior approval of NRB.
2. Liquidator shall apply to the court the matter and notify NRB, about any acts against the interest of the depositors and creditors of the BFI, which comes to the knowledge of the liquidator, done up to 6 months before the order of the court for compulsory cancellation.
3. The court can invalidate or declare void such acts if any of the following acts have been seen to be done in the application under Sub-section (2):-
a. Decision about giving a gift;
b. In case of acts against the interest of depositors and creditors;
c. Borrowing has been repaid or transferred before the due date or collateral has been released or transferred or mutated before the due date of payment;
d. During any course of action, any agreement was found to have been entered into in a way resulting in extra liability, then as per the common practice, for BFI;
e. Any agreement or transaction was found to have been entered in different terms than regular banking and financial transactions allowed under this Act;
f. Any agreement entered in a way of providing employment to the related persons.
4. Following transactions shall be void in case any BFI has been compulsorily canceled:-
a. Preferential transactions entered into up until 6 months prior or after the date of initiation of compulsory cancellation;
b. Preferential transactions entered into with the related person up until 1 year prior or after the date of compulsory cancellation;
c. Transaction, entered into against inadequate consideration, as a result of which BFI was ordered for compulsory cancellation or any other transaction entered into against inadequate consideration after the initiation of compulsory cancellation;
d. Forged transactions entered into up until 2 years prior or after the initiation of compulsory cancellation;
5. Liquidator shall apply to the court to declare void the transactions mentioned in Subsection (4).
6. Court can issue the following orders in case it is satisfied that any transaction is going to be declared void:-
a. Issuing an order to repay the whole or some of the amount, paid by BFI to the concerned person concerning such transaction, to the liquidator;
b. Issuing order, to return the assets or amount equal to such assets about such transaction to the liquidator, to concerned person;
c. Issuing order to full or partial waiver or release of the credit availed by BFI from such transaction or security or guarantee provided by BFI against such credit;
d. Issuing order that exemption or transfer or void or ineffective or idle agreement as a result of the voidable transaction between BFI and another person, cannot be enforced ;
e. Court can issue any other order necessary to implement the order under this Subsection.
7. Director, officer, employee, or any other person shall be held personally liable for any loss or damage caused to the BFI due to any acts/transactions under Sub-section (3) & (4) entered into by them.
84. Particulars of Assets & Liabilities
1. Liquidator shall prepare expeditious particulars of assets, liabilities, and probable liabilities of BFI under compulsory cancellation, and submit a copy of such to NRB and keep one copy at BFI concerned;
2. Following matters shall be included in particulars prepared under Sub-section (1):-
a. Liability towards the depositors & creditors of BFI;
b. Details of all the assets and liabilities of BFI and the estimated value of the same;
c. Agreement executed by BFI to receive service;
d. Material transaction executed by BFI up to 6 months before the order of compulsory cancellation.
3. Particulars under Sub-section (1) shall be updated quarterly by the liquidator and make available to the creditors if requested by them;
85. Transaction to be Ended
1. Within 6 months from the order of compulsory cancellation of BFI, the liquidator can end the following transactions of such BFI:-
a. Any agreement of employment executed by BFI;
b. Any agreement for service executed on which concerned BFI is a party;
c. All the acts and agreements that were being carried on by BFI in the capacity of the trustee;
d. As per the necessity and situation any regular transactions of BFI or any branch office of such BFI;
e. Any liability to be discharged by BFI without any limit;
f. Any other transactions prescribed by NRB.
2. No additional claim of the amount or any damage against any transaction ended, exceeding the amount to be paid by BFI up to the date of ending of such transaction under Sub-section (1) can be made.
86. Notice of Submitting the Claim
The liquidator shall publish the notice as follows within the time prescribed by NRB to submit particulars mentioning the mode of receiving payment as per claim made or amount receivable by the person having any claim over the BFI under compulsory liquidation within 1 month from the date of publication or transmission of such notice:-
a. Publishing notice in any English and Nepali national daily;
b. Attaching the notice at the main office and at every office of BFI for public information.
87. Liquidator can Accept or Reject the Claim
1. Liquidator shall notify the claimant whether or not the claim has been accepted fully or partially after verifying the claim received u/s 86 based on available evidence and publish the public information in respect of the same within 90 days of receipt of claim u/s 86.
2. Claimant whose claim has either been accepted partially or rejected shall submit their claim along with additional evidence within 15 days of receipt of information under Sub-section (1) about the acceptance or non-acceptance of claim ;
3. Liquidator can make full or partial revision on claims received under Sub-section (2), if necessary.
4. Claimant who’s not satisfied with the decision of liquidator under Sub-section (1) & (3) can appeal to the court within 21 days from the date of receipt of information about such.
88. Classification of Claim
1. Liquidator shall classify, accepted, partially accepted, or rejected claim u/s 87, as per the same head.
2. Part of the accepted claim of partially accepted claim shall be classified as accepted and remaining as rejected under Sub-section (1).
3. While preparing the list of claims, the name & address of the claimant, place, date & amount of repayment to be made and particulars of security against such claim shall be clearly stated.
4. Any claim which is under protest shall be separately shown under protested claim until the final decision has been made on the same.
5. Claim, which and the value of which, is uncertain shall be classified as per classification specified by the liquidator himself/herself.
6. Claims of secured creditors shall be classified separately.
7. Accepted claims shall be listed based on the priority of payment under this Act.
89. Meeting of Creditors
1. A committee of creditors can be formed for the purpose of mutual discussion and understanding between creditors by the creditors of BFI under compulsory cancellation.
2. Liquidator of BFI under compulsory liquidation can assent with the creditors of such BFI after necessary discussion subject to the terms and directions specified by NRB.
90. Cancellation Plan
1. Liquidator shall, within 30 days of classification of claim u/s 88, prepare a detailed plan for cancellation of BFI and submit it to the court for approval along with notifying about NRB.
2. Following matters shall be included in the plan to be submitted under Sub-section (1):-
a. Detailed particulars, nature, and result of the assets and liabilities of the BFI;
b. Past and projected income statement of the BFI;
c. Detailed statement in respect of whether or not the present economic transactions of BFI is to be continued or canceled;
d. Decision or order from the court;
e. Particulars of actions taken to claim the damage caused by any offense or illegal acts done by the promoter, officer, or employee of the BFI;
f. Detailed particulars of the classification and priority of payment of claim;
g. Plan of sale of major assets or group of assets or liquidity of BFI;
h. Liability and repayment schedule of payment likely to be made to the depositors and creditors of the BFI within coming 90 days;
i. Cost & expense of compulsory cancellation;
j. Any other particulars as prescribed by NRB.
3. Liquidator shall update quarterly the cancellation plan under Sub-section (1).
4. The cancellation plan shall be made available for inspection by the creditors of BFI mentioned in such a plan.
5. Notwithstanding anything contained in this Act, BFI shall not be re-capitalized by investing partially or fully after the initiation of compulsory cancellation.
91. Immediate Advance to the Depositors
1. Notwithstanding anything contained under this Chapter, the liquidator can distribute up to Rs.1,00,000/- per account as an advance to the depositors of BFI under compulsory cancellation in a condition that such shall be adjusted at the time of distribution of deposit.
2. Advance given under Sub-section (1) shall be adjusted at the time of making payment u/s 94.
92. Right to Sell the Assets
Liquidator, being under the direction given by NRB, can sell the assets provided as the security to the creditors whose claims were accepted and any other assets as following:-
a. Easily marketable securities, foreign currencies, or other immediately marketable assets at the place of the transaction;
b. Easily marketable securities, foreign currencies, or other assets provided as security to the creditors can be sold by the creditors themselves;
c. In case the liquidator is convinced that the right value would not be received at an auction sale, it can be sold in any way;
d. Any other provision as specified by NRB.
93. Settlement of Claim
The liquidator shall publish and transmit a public notice disclosing the nature, amount & priority of payment of a claim to settle the claim as per cancellation plan u/s 90.
94. Priority Payment
1. BFI under compulsory cancellation shall make the payment as per the following priority respectively:-
a. Expenses incurred for compulsory cancellation;
b. Amount up to deposit secured by deposit insurance as per the prevailing law not exceeding the accepted claim of depositors or if such deposit amount has been paid to deposit insurer established as per the prevailing law, an amount equal to such payment;
c. Deposit remaining to be paid after making payment as per Clause (b);
d. Amount of salary or any other liability to be paid to the employees of the BFI;
e. Amount to be paid to GON, local authority, or NRB;
f. Amount of fee or as against the valuation to be paid to other BFI;
g. Amount to be paid to other creditors or as per another claim;
h. Shareholders as per the prevailing law.
2. Notwithstanding anything contained in this Chapter, creditor if willing to accept against the amount receivable by him/her/it and gives an application for the same, any assets which remain unsold after making the sale as per Section 92, liquidator being under the valuation guidelines prescribed by NRB can transfer such assets to such creditor.
3. Notwithstanding anything contained in this Chapter, any assets provided as a security to the secured creditors shall only be used to pay the liability towards them.
95. Amount or Assets remaining Unpaid
In case the concerned person doesn’t show up to receive the payment of the number of assets within the time prescribed in the notice given for receiving the payment of the number of assets under this Chapter, such amount or assets shall be kept under the custody of liquidator as per the direction of NRB until such a person shows up to receive the same.
96. Decision of Cancellation
1. Liquidator shall apply to the court for the cancellation of BFI along with the particulars of procedure carried on after the completion of cancellation process of BFI which has gone under compulsory cancellation under this Chapter and whose license has been canceled by NRB.
2. After necessary examination and verification of application submitted by a liquidator under subsection (1), the court can pass a decision that such BFI has gone under compulsory cancellation.
3. Liquidator shall publish the decision of the court under Sub-section (2) at least once in a Nepali and English national daily and while publishing such, order of the court and the major matters of the report of cancellation shall also be included.
4. Liquidator shall request company registrar to remove the name of such BFI from the list of a company registered after the publication of notice under Sub-section (3) and as per the above request company registrar shall publish in Official Gazette of Nepal the notice that the name of such BFI has been removed from the register of the company.
5. After the publication of notice of removal of the name of BFI in the Official Gazette of Nepal, the process of compulsory cancellation of such BFI shall come to an end and such BFI is deemed to be dissolved duly.
6. Any liability, under this Act or any other prevailing law due to compulsory cancellation, of any director, CEO, officer, employee, shareholders, or any other person shall remain to be continued.
97. Compulsory Cancellation of BFI operating in More than One Country
1. Compulsory cancellation procedure of branch of BFI operating in more than one country shall be as decided by NRB considering the international practice.
Provided that the compulsory cancellation of BFI acting as a subsidiary company of BFI which is operating in more than one country shall be under this Chapter.
98. No Claim
No claim shall be submitted by the creditor who has not submitted the claim within the time prescribed in the notice under Section 86 after the end of time prescribed in such notice. Provided there shall no effect on the right of depositor due to non-submission of the claim of the amount in the deposit account of such depositor.