From Bloomberg By Dawn Kopecki & Hugh Son May 22, 2013 JPMorgan Chase & Co.
Financial Intermediary Societies Act of 1999
(amended through 2002)
The Financial Intermediary Societies Act of 1999 (amended through 2002) contains provisions concerning the regulation of societies in Nepal, particularly non-governmental organizations (NGOs) engaged in microfinance as a financial intermediary. This is an unofficial version of this law. However, note that it appears that the Nepal Rastra Bank has currently stopped issuing licenses to NGOs under this act.
This act consists of the following parts:
- Chapter 1 Preliminary: interprets the application of this act and defines language used within the act;
- Chapter 2 Licensing Arrangements: lays out the requirements for obtaining a license to operate financial intermediation services;
- Chapter 3 Functions, Duties, and Powers of Societies: addresses the role and responsibilities for financial intermediaries carrying out microfinance activities;
- Chapter 4 Functions, Duties, and Powers of Banks: explains the powers and authority of the central bank, Nepal Rastra Bank, such as the power to inspect, investigate, and issue directives;
- Chapter 5 Funds, Accounts, and Audit of Societies: provides guidelines for management of the microcredit fund, and principles for accounting and auditing;
- Chapter 6 Penalties: describes penalties for failing to comply with the act; and
- Chapter 7 Miscellaneous: addresses income tax exemption, the right to amalgamate, the submission of annual reports, and other matters.