Banking, Insurance and Financial Law

We understand the laws and regulations governing Nepal’s banking sector, and we treat banking law as a specialisation rather than an extension of general commercial practice. We have advised on large and complex transactions for national and international banks, insurance companies and financial institutions, supported them through a heavy compliance burden and represented them in litigation and arbitration when disputes arise.

The Legal Framework

Nepal’s financial sector sits under a layered regulatory structure. Banks and financial institutions are governed by the Bank and Financial Institution Act (BAFIA), 2073 (2017), administered by Nepal Rastra Bank under the Nepal Rastra Bank Act, 2058 (2002). Insurance falls under the Insurance Act, 2079 (2022), overseen by the Nepal Insurance Authority, while securities and capital market activity is regulated by the Securities Act, 2063 (2007) and SEBON.

Criminal and compliance exposure runs through the Banking Offence and Punishment Act, 2064 (2008) and the Asset (Money) Laundering Prevention Act, 2064 (2008), enforced with the Financial Intelligence Unit and Nepal Rastra Bank’s directives. Cross-border capital movement, including remittance, repatriation, foreign lending and foreign exchange, is governed by the Foreign Exchange (Regulation) Act, 2019 (1962) and NRB’s Unified Directives, which are updated regularly and carry real practical weight.

That mix of statute, regulator and frequently updated directive is what makes the sector demanding to advise on. A transaction compliant under last year’s directive may need restructuring to stay compliant under this year’s, and staying current with NRB’s regulatory posture is as much a part of the job as knowing the underlying Acts.

What We Do

Debt recovery, collection and foreclosure on behalf of lenders.
Complex financial transactions: syndicated and consortium lending, debt restructuring, refinancing, reinsurance, derivatives, secured and unsecured lending, bank guarantee facilities, international lending, project financing and enforcement.
Transaction documentation: loan agreements, bank guarantees, deeds and related contracts.
Legal opinions on aspects of financial transactions before a deal proceeds.
Remittance and repatriation advisory within NRB’s foreign exchange framework.
Regulatory compliance under the Foreign Exchange Regulation Act, the Asset (Money) Laundering Prevention Act and NRB circulars and directives.
Litigation and arbitration in banking-related disputes.

Our Approach

We work alongside foreign law firms and directly with foreign and domestic financial institutions. Our experience with Nepal’s regulators and the key stakeholders in the banking sector gives us a practical view of what counts as sound, commercially workable advice, not only advice that is technically correct on paper.