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Chapter-11

Provisions Relating to Offenses and Punishment

70. Acts to be deemed as offenses : Commission of any of the following acts shall be deemed to be a commission of an offense under this Act:
(a) Carrying on the financial transactions without obtaining a license under this Act or in contravention of the conditions of the license or accepting deposits or
supplying credit or issuing debentures or other financial instruments in violation of this Act or the orders or directives issued under this Act or paying or obtaining
interest in contravention of the term prescribed by the Rastra Bank or dealing in foreign exchange in contravention of this Act or the laws in force or the orders or directives issued under this Act;
(b) Failure of any officer who is responsible for maintaining the secrecy of the financial transactions, accounts, records, ledgers, books and other accounts related
documents of the licensed institution pursuant to this Act or the orders or directives issued under this Act to maintain such secrecy;
(c) Violation by any one of this Act or any order or directive issued under this Act, other than that mentioned in Clause (a) or (b).

71. Punishment :

(1) Any person who commits any of the following offenses shall be punished as follows:
(a) Any person who carries on the financial transactions without obtaining a license under this Act shall be punished with a fine not exceeding three hundred per cent of the amount involved in the transactions or with imprisonment for a term not exceeding three years or with both punishments, along with the confiscation of the amount involved in the said transactions.
(b) Any person who deals in foreign exchange in contravention of this Act or any other laws in force shall be punished with a fine not exceeding three hundred per
cent of the amount involved in the offense or with imprisonment for a term not exceeding three years or with both punishments.
(c) Any person who accepts deposits or supplies credit or issues debentures or other financial instruments in contravention of this Act or the order or directive issued
under this Act or pays or obtains interest in contravention of the term prescribed by the Rastra Bank shall be punished with a fine not exceeding two hundred per cent of the amount involved in the offense or with imprisonment for a term not exceeding two years or with both punishments.
(d) If any officer who is responsible for maintaining the secrecy of the financial transactions, accounts, records, ledgers, books and other accounts related documents of a licensed institution pursuant to this Act or the order or directive issued under this Act fails to maintain such secrecy, such officer shall be punished with a fine not exceeding five hundred thousand rupees or with imprisonment for a term not exceeding one year or with both punishments.
(e) Any person who commits the offense referred to in Clause
(c) of Section 70 shall be punished with a fine equal to the amount involved in the offense or with imprisonment for a term not exceeding one year or with both punishment, along with the confiscation of the amount involved in the offense.
(f) If it is not possible to confiscate, and determine the figure of, the amount involved in an act and action done and taken by any person in contravention of this Act, such person shall be punished with a fine not exceeding one million rupees or with imprisonment for a term not exceeding one year or with both punishment, according to the gravity of the offense.
(2) If any licensed institution or any other person, firm, company, or institution commits any offense referred to in Section 70, the concerned officer of such licensed person, firm, company or institution who commits such offense shall be subjected to the punishment as referred to in this Section.
(3) Any licensed institution or any other person, firm, company or institution that attempts to commit any offense referred to in Section 70 or aids and abets in the commission of such offense in any manner shall be subjected to punishment which is not more than half the punishment referred to in Sub-section (1).

72. Government of Nepal to be plaintiff : Any case relating to the offense referred to in Section 70 shall be filed, with the Government of Nepal being the plaintiff, and such case shall be deemed to have been included in Schedule 1 of the Government Cases Act, 2049 (1993).

73. Rastra Bank to give information : If the Rastra Bank learns from any source that any person has committed any of the offenses referred to in Section 70, the Rastra Bank shall write to the Government of Nepal or concerned body for necessary action.

74. Punishment for violation of regulation of Rastra Bank : (1)If any licensed institution violates any order or directive issued by the Rastra Bank under the Nepal Rastra Bank Act, 2058 (2002) or this Act or the Rules or Bye-laws framed there under the Rastra Bank may impose the following punishment on such licensed institution, according to the gravity of the violation of regulation:
(a) To warn, or give warning in writing;
(b) To get the Board of Directors to sign a bond for taking reformative measures;
(c) To issue written order to end repeated violations, remain away therefrom and take reformative measures;
(d) To restrain the licensed institution from distributing dividends to its shareholders or issuing bonus shares or from doing both of these acts;
(e) To restrain the licensed institution from accepting deposits or advancing credits or from doing both of these acts;
(f) To impose a full or partial restriction on the transactions of the licensed institution;
(j) To suspend or cancel the license of the licensed institution;
(k) To file an application with the Appellate Court for the dissolution of the licensed institution.
(2) Notwithstanding anything contained in Sub-section (1), in the event of the failure of a licensed institution to submit such documents, returns, data or records as demanded by the Rastra Bank or its officer carrying out inspection and supervision under the Nepal Rastra Bank Act, (2002) or this Act or the Rules or Bye-laws framed thereunder, within the time prescribed by the Rastra Bank or its officer carrying out such inspection and supervision, the Rastra Bank may punish such licensed institution with a fine ranging from ten thousand rupees to fifty thousand rupees, based on the classification of the licensed institution.
(3) If the licensed institution fails to pay the fine imposed under Sub-section (2) within three days, the Rastra Bank may realize it by debiting it from the account of such licensed institution with the Rastra Bank.
(4) If any officer of a licensed institution violates the Nepal Rastra Bank Act, 2058(2002) or this Act or the Rules or Bye-laws framed thereunder or any order or directive issued by the Rastra Bank thereunder or acts contrary to the interests of depositors or investors or fails to submit such documents, returns, data or records as demanded by the Rastra Bank or its officer carrying out inspection and supervision, within the time prescribed by the Rastra Bank or its officer carrying out such inspection and supervision, the Rastra Bank may punish such officer with punishment as follows, according to the gravity of the violation of such order or directive:
(a) To warn or admonish him or her.
(b) To suspend him or her.
(c) To impose on him or her a fine not exceeding five hundred thousand rupees.
(d) To order the Board of Directors of the concerned licensed institution to withhold all facilities including his or her salary and allowances.
(e) To order the Board of Directors of the concerned licensed institution to remove him or her from the office of director if he or she is a director or to retire him or her from the service if he or she is an officer, notwithstanding anything contained in the laws relating to the conditions of service of such employee.
(5) While imposing punishment on any person under this Section, such person shall not be deprived of a reasonable opportunity to defend him or her. Provided that while imposing punishment under Clause s (a), (b), (c) and (d) of Sub-section (1), Sub-section (2) and Clause s (a) and (b) of Sub-section (4), it shall not be necessary to provide an opportunity for defense.

75. Appeal :

(1) Any licensed institution or any officer of that institution who is not satisfied with any punishment imposed by the Rastra Bank under Section 74 may make an appeal to the Appellate Court within thirty five days from the date of receipt of the order of such punishment.
(2) While making an appeal pursuant to Sub-section (1), a deposit in a sum that is fifty per cent of the fine, if any, imposed, shall be furnished with the Rastra Bank.

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