Banking and insurance

Banking and insurance law in Nepal encompasses the regulations and legal framework that govern the operations of banks and insurance companies within the country. The sector is primarily governed by the Nepal Rastra Bank Act, 2058, Bank and Financial Institution Act, 2073, and the Insurance Act, 2049 which provide the foundational guidelines for the establishment, functioning, and supervision of financial institutions. Under these laws, banks are required to obtain licenses from the Nepal Rastra Bank, the central monetary authority, to operate in Nepal. They must adhere to prudential norms, maintain required reserves, and comply with anti-money laundering and know-your-customer regulations. Similarly, insurance companies must obtain licenses from the Insurance Board of Nepal and abide by the guidelines set forth by the board, ensuring consumer protection and financial stability. The laws also define the rights and obligations of both banks and insurance companies and outline the procedures for dispute resolution. The objective of these laws is to promote a stable, transparent, and efficient financial system that safeguards the interests of customers and contributes to the economic growth of the nation.