Financial services are the lifeblood of any economy, and in Nepal this sector is evolving rapidly against the backdrop of strict regulatory oversight. Nepal’s financial sector includes Class A commercial banks, Class B development banks, Class C finance companies, microfinance institutions, insurance companies, and emerging fintech and payment service providers. While the market is ripe with opportunities given a growing middle class and historically underpenetrated services (such as banking in rural areas, digital payments, and remittances), it is also characterized by intense competition and regulatory complexity. The Nepal Rastra Bank (central bank) and other regulators enforce prudential norms, capital requirements, anti-money laundering (AML) standards, and consumer protection rules that financial institutions must diligently comply with. Moreover, the sector has seen consolidation and restructuring (mergers of banks, acquisition of weaker institutions) and needs to respond to technological changes and cybersecurity risks. Legal issues in this arena can range from regulatory approvals for new products, resolution of non-performing assets, consumer and investor disputes, to cross-border finance transactions.

Gandhi & Associates has a deep and broad practice in banking and financial services, advising a spectrum of clients from large multinational banks and insurance companies to local banks, fintech startups, and non-bank financial institutions. We assist with regulatory compliance and licensing, helping institutions obtain necessary licenses (for example, bank or microfinance licenses, payment service provider licenses) and ensuring ongoing compliance with directives from the Nepal Rastra Bank and Insurance Authority. Our team structures and documents complex financing transactions – including syndicate loans, trade financing, project financing (in collaboration with our project finance practice), and guarantee facilities – often involving foreign lenders or borrowers. We also counsel financial institutions on product development and documentation (such as standard loan agreements, credit card terms, mobile banking terms and conditions) to ensure they meet legal requirements and best practices. In the contentious sphere, our lawyers represent banks and financial companies in dispute resolution: recovering bad debts (through negotiation, DRT proceedings, or court litigation), handling fraud investigations and asset tracing, and resolving customer disputes or regulatory enforcement actions. With a keen understanding of the regulatory climate and commercial pressures, we provide timely, commercially savvy legal advice that helps financial sector clients manage risk and achieve their business objectives.

Representative Experience:

• Advised a leading Class A commercial bank of Nepal on recovering losses caused by fraudulent transactions that occurred in an institution with which the bank had previously merged. Our work included coordinating a forensic investigation, pursuing legal action to recover assets, and liaising with regulators to ensure compliance in the recovery process.
• Advised a major international remittance and money transfer service provider on establishing its operations in Nepal – a first-of-its-kind arrangement integrating with local banks for foreign currency settlements. We provided regulatory guidance on Nepal Rastra Bank requirements, structured the partnership with local financial institutions, and advised on AML/CFT compliance and other operational regulations;
• Advised bilateral and multilateral aid agencies, including GIZ, on the legal setup and structuring of sustainable financing facilities such as the Central Renewable Energy Fund and the Public Transport Electrification Fund. This involved drafting fund governance documents, ensuring compliance with Nepali financial regulations, and securing any necessary governmental approvals or exemptions;
• Represented one of Europe’s largest banking groups and a pan-Middle Eastern private bank in relation to their correspondent and trade finance dealings in Nepal, advising on Nepali banking regulations, sovereign risk considerations, and mechanisms for securing repayment from local counterparties;
• Advised major Nepali banks – Himalayan Bank, Bank of Kathmandu, and Nepal Investment Bank Ltd (NIBL) – asserting claims under cross-border counter-guarantees related to infrastructure construction projects. The matters involved coordination with foreign counsel in Europe and the Middle East to secure payment from counter-guarantor banks; and
• Assisted Nepal Bank Limited in resolving a complex letter of credit issue that arose in New York, working with foreign counsel to address jurisdictional challenges and protect Nepal Bank’s interests under both Nepali law and UCP 600 (the Uniform Customs and Practice for Documentary Credits).