BNK 211

BANKING LAW

By
Ghana Shyam Shrestha
 Class C: Finance company

 Finance company are licensed by Nepal Rastra Bank in

‘Class C’.
 finance company, specialized financial institution that supplies
credit for the purchase of consumer goods and services by
purchasing the time-sales contracts of merchants or by granting
small loans directly to consumers.
 finance company are not allowed to invest in government
security in Nepal.
 Finance companies are those financial institution which link the
savers and users.
 They collect small saving of the individuals and mobilize it in
the productive sectors in the form of loan and investment.
 Class C: Finance company

 Nepal Rastra Banks has classified the finance

company into two categories, national level
covering 4-10 district and district level covering 1-
3 districts
 Carries out financial transaction as referred to in
sub-section (3) of section 49 of BAFIA 2073

S.N. Types Minimum Capital requirement

1. National level 800 Million
3. District level covering 1-3 400 Million
district
 Class D: Micro-Finance financial institutions

 Micro Finance are type of 'D' financial institution as per

Banking and Financial Institutions Act, 2073 and are
regulated by Nepal Rastra Bank.
 Fundamentally provide credit without collateral
 Usually in relatively small amounts and for short periods.
 Provide loan on the basis of group lending
 There are 64 microfinance companies currently in
operation.
 Class D: Micro-Finance financial institutions

 Nepal Rastra Banks has classified the micro-finance

into three categories, national level, district level
banks covering 4-10 districts and district level bank
covering 1-3 districts.
 Carries out financial transaction as referred to in
sub-section (4) of section 49 of BAFIA 2073

S.N. Types Minimum Capital requirement

1. National level 100 Million
2. District level covering 4-10 60 Million
district
3. District level covering 1-3 20 Million
district
 Infrastructure development bank

 Infrastructure financing gap by raising resources

from domestic and international market in the form
of equity, debt, structured funds and bonds
 to promote the culture of Private Sector Participation
in infra-projects
 work closely with the Government of Nepal in
planning and developing national policies for
infrastructure development.
 Carries out financial transaction as referred to in sub-
section (5) of section 49 of BAFIA 2073
Functions of Infrastructure development bank

 To Disburse loans and financing in shares in projects relating to infrastructure

development
 To Finance in securities of the companies operating projects relating to
infrastructure development
 To open letters of credits and issue guarantees for purchase, sale or supply or
installation of machineries, equipment and tools required for construction and
operation of projects relating to infrastructure development
 To issue financial instruments in national or foreign currencies with approval
of the Rastra Bank for collecting fund required for investment in projects
concerning infrastructure development and to acquire loan to that effect
 To mobilize resources by accepting long term deposits or issuing debenture
 To carry on leasing transactions with approval of the Rastra Bank
 To provide loans and facilities for projects by accepting guarantee of foreign
banks and financial institutions
THANK
YOU