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Advocate Suman Dhungana
Bank and Financial Institution Act
(BAFIA) 2073
Overview, Objectives, Features, and
Major Provisions
Advocate Suman Dhungana
Objectives of BAFIA 2073
 - Promote public trust in financial institutions
 - Ensure quality and reliable banking services
 - Protect rights and interests of depositors and
investors
 - Mitigate banking risks
 - Foster economic liberalization
 - Establish legal provisions for incorporation,
management, and operation
Advocate Suman Dhungana
Key Features of BAFIA 2073
 - Umbrella legislation for all banks and financial institutions
 - Mandatory incorporation as public companies
 - Capital structure requirements (30% public, 51% promoters)
 - Board of Directors: 5-7 members, max two terms
 - CEO qualifications and tenure guidelines
 - Prior approval from Nepal Rastra Bank (NRB)
 - Prohibition on unauthorized financial activities
 - Classification into A, B, C, D categories
 - Share buyback provisions
 - Emphasis on stability and governance
Advocate Suman Dhungana
Major Provisions of BAFIA 2073
 - Incorporation as public companies with NRB approval
 - Capital formation and share transaction regulations
 - Defined roles and composition for Board of Directors
 - CEO qualifications and term limits
 - Regulatory compliance with NRB directives
 - Maintenance of required capital and reserves
 - Operational guidelines and risk management
practices

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Band And Financial Institution Act_2073_Presentation.pptx

  • 1. Advocate Suman Dhungana Bank and Financial Institution Act (BAFIA) 2073 Overview, Objectives, Features, and Major Provisions
  • 2. Advocate Suman Dhungana Objectives of BAFIA 2073 - Promote public trust in financial institutions - Ensure quality and reliable banking services - Protect rights and interests of depositors and investors - Mitigate banking risks - Foster economic liberalization - Establish legal provisions for incorporation, management, and operation
  • 3. Advocate Suman Dhungana Key Features of BAFIA 2073 - Umbrella legislation for all banks and financial institutions - Mandatory incorporation as public companies - Capital structure requirements (30% public, 51% promoters) - Board of Directors: 5-7 members, max two terms - CEO qualifications and tenure guidelines - Prior approval from Nepal Rastra Bank (NRB) - Prohibition on unauthorized financial activities - Classification into A, B, C, D categories - Share buyback provisions - Emphasis on stability and governance
  • 4. Advocate Suman Dhungana Major Provisions of BAFIA 2073 - Incorporation as public companies with NRB approval - Capital formation and share transaction regulations - Defined roles and composition for Board of Directors - CEO qualifications and term limits - Regulatory compliance with NRB directives - Maintenance of required capital and reserves - Operational guidelines and risk management practices