Employee Provident Fund Act, 2019 (1962)


Published: 1962

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$20 per month, or Get a Day Pass for only USD$4.99.
Provident fund Act, 2019 E
1
Employee Provident Fund Act, 2019 (1962)
Date of Authentication and Publication
2019.4.10 (25 July 1962)
Amendments:
1. Employee Provident Fund (Amendment) Act,
2019 (1963)
2019.12.30 (12 April
1963)
2. Some Nepal Acts Amendment, Repeal and
Continuance Through Re-arrangement Act, 2019
(1963)
2019.12.30 (12 April
1963)
3.

Employee Provident Fund (Second Amendment)
Act, 2023 (1996) 2023.4.31 (15 Aug. 1966)
4.

Employee Provident Fund (Third Amendment)
Act, 2029(1972) 2029.6.5 (21 Sept. 1972)
5. Employee Provident Fund (Fourth Amendment)
Act, 2030 (1973) 2030.5.15 (31 Aug. 1973)
6. Employee Provident Fund (Fifth Amendment)
Act, 2042 (1985) 2042.6.23 (9 Oct. 1985)
7. Administration of Justice Reforms (Fourth
Amendment) Act, 2043 (1986) 2043.7.24 (10 Nov. 1986 )
8. Employee Provident Fund (Sixth Amendment)
Act, 2047 (1991)
2047.10.27 (10 Feb.
1991)

2
9. Employee Provident Fund (Seventh Amendment)
Act, 2048 (1992)
2048.12.30(12 April
1992)
10.

Employee Provident Fund (Eighth Amendment)
Act, 2053 (1997) 2053.9.17 (1 Jan 1997)
11. Income Tax Act, 2058 (2002) 2058.12.19 (1 April 200)
12. Amending Some Nepal Acts to maintain Gender
Equality Act, 2063 (2006) 2063.7.17 (3 Nov. 2006)
13.

Republic Strengthening and Some Nepal Laws
Amendment Act, 2066 (2010)1 2066.10.7 (21 Jan. 2010)
Act Number 10 of the Year 2019 (1962)
An Act made to provide for the Employee Provident Fund
Preamble: Whereas, it is expedient to provide for the Employee Provident Fund
for the employees of the Government of Nepal and corporate bodies and other
employees.2
Now, therefore, be it enacted by His Majesty King Mahendra Bir Bikram
Shah Dev in accordance with Article 93 of the Constitution of Nepal.3
Chapter-1
Preliminary
1. Short title and commencement: (1) This Act may be called as the
"Employee Provident Fund Act, 2019 (1962).”
1 This Act came into force on 15 Jestha 2065, "Prasati" and the word "Kingdom" has been deleted. 2 Amended by Fifth Amendment. 3 Amended by Some Nepal Acts Amendment, Repeal and Co tinuance Through Re-arrangement
Act, 2019.

3
(2) ……………….4
(3) This Section of this Act shall come into force immediately, and
the other Sections shall come into force on such date as may be appointed
by the Government of Nepal, by publishing a Notificat on in the Nepal
Gazette, from time to time.5
2. Definitions: Unless the subject or the context otherwise requires, in this
Act:
(a) "Fund" means the Employee Provident Fund establi hed under
Section 3.
(b)6 "Employee" means any civil employee, employee of Army, Police,
Armed Police,7 Constitutional Body, …….8 and employee of the
Fund and teacher who gets the amount to be deducted from his or
her monthly salary deducted and paid to the Fund, a this term also
includes any employee, labour or worker of a body who gets amount
to be paid to the Fund pursuant to Section 12B. and such other class
of employees as specified by the Government of Nepal, by
publishing a Notification in the Nepal Gazette.
Explanation: For the purposes of this Act, the term "employee"
means a permanent employee.
(c) “Board” means the board of directors of the Employee Provident
Fund formed under Section 4.
4 Deleted by Fifth Amendment Act. 5 (a) The Sections, other than Sub-section (1) of Section 13, and Sub-sections (1), (2), (3), (4), (5), (6)
and (7) of Section 17 commenced on 2019.6.1(17 Sept. 1962). (Date of publication of a Notification in the Nepal Gazette: 2019.5.29.
(b) Date of commencement of the Employee Provident Fu d (Fourth Amendment), 2030: 2030.4.1 (16 July 1973)
(c) Date of commencement of the Employee Provident Fu d (Eighth Amendment), 2053: 2053.10.18 (31 Jan. 1997)
6 Amended by Sixth Amendment. 7 Inserted by Republic Strengthening and Some Nepal Laws Amendment Act, 2066. 8 Deleted by Republic Strengthening and Some Nepal Laws Amendment Act, 2066.

4
(c1)9 "Chairperson" means the chairperson of the Board.
(c2) 10 "Director" means the member of the Board, and thiserm also
includes the chairperson and administrator.
(c3) 11 "Administrator" means the administrator of the Fund appointed
pursuant to Section 6A.
(d) "Bond" means a loan disbursed by the Government of Nepal under
the Domestic Borrowings Act, 2059 (2002) and this term also
includes a bond of a foreign government.
(e) 12…………..
(f) 13…………..
(g) 14…………..
(h) 15…………..
(i) 16…………..
(j) "Debenture" means a bond of loan borrowed by a company against
the security or guarantee of its assets.
(k) 17………….
(l) 18………….
(m)19 "Salary' means only such a salary that is drawn by an employee
according to the prevailing scale of the post in which he or she has a
9 Inserted by Sixth Amendment. 10 Inserted by Sixth Amendment. 11 Inserted by Sixth Amendment. 12 Repealed by Second Amendment. 13 Repealed by Second Amendment. 14 Repealed by Second Amendment. 15 Repealed by Second Amendment. 16 Repealed by Second Amendment. 17 Repealed by the Second Amendment. 18 Repealed by Second Amendment. 19 Amended by Third Amendment.

5
lien, in consideration for the service rendered by him or her in
accordance with the conditions of service.
(n)20 "Office" means an office or institution21 with obligation to deduct
the Fund amount from the salary of an employee and cre it the same
to the account specified by the Fund.
(n1)22 "Institution" means a bank, financial institution, company, firm,
industry or similar other governmental or non-governmental
institution established as a body/institution pursuant to the laws in
force, 23and this term also includes a diplomatic mission or
international institution situated in Nepal.
(o)24 "Prescribed" or "as prescribed" means prescribed or as prescribed in
the Rules or Bye-laws framed under this Act.
(p)25 "Prescribed by the Fund" means as specified in the Bye-laws framed
by the Fund under this Act or a notice of the Fund.
Chapter-2
Establishment, formation and provision
3. Establishment of the Fund: (1) There shall be established a Fund by the
name of the "Employee Provident Fund". The following amounts shall be
credited to the Fund; and expenses shall be chargeable on the Fund for all
acts and activities as required to be done under this Act or the Rules framed
hereunder:
20 Inserted by Fifth Amendment. 21 Amended by Third Amendment. 22
Inserted by Sixth Amendment.
23 Inserted by Eighth Amendment. 24 Inserted by Fifth Amendment. 25
Inserted by Fifth Amendment.

6
(a) All amounts provided by the Government of Nepal or
other persons for financial assistance to the Fund;
(b) All amounts deducted from the salary of employees
and amounts added thereto by offices26 pursuant to this
Act;
(c) All amounts realized as interest and profits on and
from the amounts of the Fund;
(d) All amounts credited to the civil provident fund,
military monetary fund and employee provident fund
in operation by the Government of Nepal prior to the
commencement of this Act; and
(e) All amounts received by the Fund.
(2)27 All amounts of the Fund shall be deposited in the Nepal Rastra
Bank or any other bank specified by the Board.
Provided that, the amounts of the Fund shall be deposited in the
Land Revenue Office or Fund and Recovery Office in a place where such a
bank is not available.
(3) The Fund shall be an autonomous28 and body corporate with
perpetual succession. This body shall have a separat se l of its own for all
of its activities. It may sue by its name and be also sued by the same name.
(4) The Fund may, subject to this Act and the Rules framed under
this Act, acquire, use, sell and transmit any movable and immovable
property, and do all such other acts as may be necessary for the
accomplishment of the objects of this Act.
26 Inserted by Fifth Amendment. 27 Amended by Third Amendment 28 Amended by Fifth Amendment.

7
(5) The head office of the Fund shall be situated in Kathmandu, and
the Fund may, as and when it so wishes, open branches and Sub-branches
in other places of Nepal for the operation of its bu iness smoothly.
4.29 Formation of the Board: (1) The Fund shall have one Board of
Directors consisting of at least Five directors:
(2) The Board as referred to in Sub-section (1) shall ve the
following directors:
(a) Person appointed by the
Government of Nepal -Chairperson
(b) Three persons nominated by the
Government of Nepal from
various services of the
Government of Nepal -Director
(c) Two persons nominated by the
Government of Nepal from
amongst banks, financial
institutions and other corporate
bodies -Director
(d) The Administrator of the Fund -Director
(3) In nominating directors pursuant to Clauses (b) and (c) of Sub-
section (2), the Government of Nepal shall nominate such directors by turn
from amongst various services of the Government of Nepal, banks,
financial institutions and various bodies corporate.
29
Amended by Sixth Amendment

8
(4) The tenure of the directors other than the administrator shall be
Three years, and upon the expiration of their tenur, they may be re-
appointed or re-nominated for one more term.
(5) If the office of any director falls vacant prior to the completion of
the tenure, the vacancy shall be filled for the remainder of term in
accordance with the same process as was followed in the filling of the
office previously.
(6) Notwithstanding anything contained elsewhere in this Section,
the Government of Nepal may, at any time, alter the dir ctors elected or
nominated pursuant to Sub-section (2).
(7) The meeting allowance to which directors are entitled for taking
part in the meeting of the Board shall be as specified by the Government of
Nepal.
(8) An officer employee of the Fund shall act as the secretary of the
Board.
5.30 Disqualification for director : Any of the following persons shall be
deemed to be ineligible to be a director of the Board:
(a) Who has become insolvent;
(b) Who is insane;
(c) Who is convicted by a court of a criminal offens involving moral
turpitude, and sentenced to imprisonment for a term xceeding Six
months;
(d) Who has obtained a contract from the Fund pursuant to Section 28 or
has been a partner in such a contract;
30 Amended by Third Amendment.

9
(e)31 Who is an employee serving in a post below the Gazetted First Class
of the Government of Nepal or the Tenth level of a body corporate
or a level equivalent thereto; or
(f) Who has been punished under Section 29.
6.32 Fulfillment of vacancy: (1) A director shall be relieved of the office of
director in the following circumstance:
(a) If he or she tenders resignation in writing and the
resignation is accepted by the Government of Nepal;
(b) If he or she absents from the meeting of the Board for
more than Three consecutive meetings, without givin
a notice, accompanied by the reason, to the Board, and
the reason for such absence is not reasonable in the
opinion of the Government of Nepal;
(c)33 If the directors nominated pursuant to Clauses (b) and
(c) of Sub-section (2) of Section 4 ceases to serve in
the concerned bodies or institutions;
(d) If another person is appointed in his or her stad by the
Government of Nepal prior to the completion of his or
her term; or
(e) If he or she suffers any disqualification set forth in
Section 5.
(2) If the chairperson or any director is not able to perform the
functions of the Board for some time because of illness or being on leave or
other reason, the Government of Nepal may temporarily ppoint another
31 Amended by Sixth Amendment. 32 Amended by Third Amendment. 33 Amended by Sixth Amendment.

10
person in his or her stead for the performance of business during that
period.
6A.34 Appointment of administrator : (1)35 The Government of Nepal shall
appoint as the administrator any one depositor (Sanchayakarta) employee
serving in the First Class of the Government of Nepal, officer first class or
the tenth class of the Fund or institution or a class equivalent thereto in
order to perform the day-to-day functions in the capacity of the
administrative chief of the Fund.
(2) 36The term of office of the administrator appointed pursuant to
Sub-section (1) shall be Five years and he or she shall hold office at the
pleasure of the Government of Nepal.
(3) The remuneration, facilities and other conditions of service of the
administrator shall be as prescribed.
7. Provision: (1) The Government of Nepal may, seeking opinion of the
Board,37 give such directions as it deems necessary to the Board from time
to time.
(2) The Board shall abide by the directions given pursuant to Sub-
section (1) and be responsible for performing all such functions of the
Corporation as required to be performed by the Fund pursuant to this Act.
(3) The Board may so delegate the powers conferred to it under this
Act to the administration or any Sub-committee as may be required. The
administrator may so delegate the authority of functio s vested in him or
her as to be performed by his or her subordinate official and employee at
34 Amended by the Sixth Amendment. 35 Amended by the Sixth Amendment. 36 Amended by the Sixth Amendment. 37 Amended by the Sixth Amendment.

11
his or her responsibility for the smooth operation of the functions of the
Fund.
8.38 Meetings of the Board: (1) The meeting of the Board shall be held at
such date, venue and time as specified by the chairperson.
(2) Meetings of the Board shall be held at least Six times in a
year, and the interval between any two meetings shall not exceed
Three months.
(3) Notwithstanding anything contained in Sub-section (2), the
chairperson or the administrator in the absence of the chairperson
shall call a meeting of the Board at any time when at least Three
directors make a request, accompanied b the agenda intended to be
discussed, for the same in writing.
(4) No meeting of the Board shall be held unless it i attended
by more than at least Fifty percent of the directors.
(5) Meetings of the Board shall be presided over by the
chairperson. In the absence of the chairman, the meting shall be
presided over by a director selected by the directors from amongst
themselves.
(6) The decision of a majority in the meeting of the Board shall
be binding, and, in the event of a tie, the chairperson may exercise the
casting vote.
(7) A director who has any personal interest in any resolution to
be discussed at a meeting shall not be entitled to take part in that
meeting.
38 Amended by the Sixth Amendment.

12
(8) Minutes regarding the names of directors present in the
meeting of the Board, the agenda and the decisions taken thereon shall
be recorded in a separate book.
(9) Other Rules of procedures of the meetings of the Board shall be
as determined by the Board itself.
9. Power of the Government of Nepal to suspend the Board: If the
Government of Nepal considers that the Board is not capable of performing
the functions required to be performed pursuant to his Act, it may, by
publishing a Notification in the Nepal Gazette, suspend the Board and
appoint any person or institution in the place of the Board to perform the
functions of the Board pursuant to this Act and all acts and actions done
and taken by such a person or institution under this Act and the Rules
framed under this Act shall be recognized as if they w re done and taken by
the Board pursuant to this Act.
10. ………………39
11. Relation between the Government of Nepal and the Fund: In
making correspondences by the Fund with the Governmnt of Nepal on
matters of obtaining opinion or approval of the Government of Nepal or of
submitting any information to the Government of Nepal ursuant to this
Act, such correspondences shall be made through the Ministry of Finance.
Chapter-3
Acts and Activities
12.40 Mandatory deduction of money from salary of employees and
payment thereof to the Fund: (1) 41Every office shall deduct the fund
39 Repealed by Sixth Amendment. 40 Amended by Third Amendment. 41
Amended by the Sixth Amendment.

13
amount at the rate as prescribed but not less than Ten percent from the
annual salary of its employees, add such amount to be set by such
percentage of that amount as prescribed and pay the sam to the Fund.
(2) The amount of Fund deduction shall be deducted
compulsorily. The consent of the concerned employee shall not be
required for such deduction.
(3)42 The amount of Fund deduction of an employee and amount to
be added thereto shall be as per the rules of the office paying salary to him
or her.
(4) If any employee is suspended, his or her amount of Fund
shall not be deducted. Provided that if the suspension of that employee
is removed on the charge being not proved, amount shall be deducted
proportionately from his or her salary of the period f his or her
suspension, amount to be added shall be added thereto43 and lump sum
of the amount shall be paid to the Fund.
(5) The following provisions shall apply to the period while any
employee is on leave without pay or with half pay:
(a) No Fund amount shall be deducted while on leave
without pay;
(b) Fifty percent Fund deduction shall be made at the
rate specified in Sub-section (1)44 while on leave
with half pay.
(6)45 Every chief of office shall regularly deduct the Fund
amount from the salary of the employees serving in his or her office
42 Amended by the Fifth Amendment. 43 Inserted by the Fifth Amendment. 44 Amended by the Fourth Amendment. 45 Amended by the Fifth Amendment.

14
and add thereto such amount as to be added thereto and furnish the
same, along with the statements, w ith such office within such period
as prescribed by the Fund.
(7)46 Nothing in this Act shall be deemed to bar the paying to the
Fund of any other amount in the name of an employee of the office, in
addition to the amount to be added pursuant to Sub-section (1).
12A. ………………47
12B.48 Fund deduction of employees of the Fund: (1) An institution where
Ten or more than Ten employees serve may deduct the Fund amount from
the monthly salary of its employees pursuant to Section 12 and pay, or
cause to be paid, to the Fund.
(2) If the Government of Nepal considers appropriate, it may, by
publishing a Notification in the Nepal Gazette, order any institution to pay
to the Fund the amount as referred to in Sub-section (1) from the monthly
salary of the employees who receive monthly salary regularly.
(3) All provisions of Section 12 shall apply to the employees who
Fund amount has been deducted under this Section.
(4) In the event of the dissolution or liquidation f an institution
deducting the Fund amount and paying the same to the Fund under this
Section, the employees of such an institution shall be deemed to have been
removed from service for the purposes of this Act.
46 Inserted by Fifth Amendment. 47 Deleted by Eighth Amendment. 48 Inserted by Eighth Amendment.

15
(5) The Fund deduction amount paid by any corporate body to the
Fund pursuant to Section 1649 prior to the commencement of this Section
shall be deemed to have been paid pursuant to Sub-section (1).
13.50 Acts to be done by the Fund after payment of money to the Fund:
(1) After the payment of money to the Fund pursuant to 51Section 12……
……52 and 12B., the amount so paid by the name of every employee shall
be paid to the account of that employee.
(2) Every year after the closure of the year, the Fund shall give an
endorsement letter or annual statements to every employee, setting out,
inter alia, the amounts deducted every month from the salary of the
employee, amount added by the office and other deductions and additions53
and interest54 accrued on the amounts so paid.
(3) The Fund shall give an identity card to every employee.
(4) The Fund may prescribe fees for the giving of the identity
card…………55 pursuant to Sub-sections (2) and (3) or giving another
identity card…………56 in the event of loss, deface or torn out of such an
identity card………..57
14.58 Entitled to withdraw amount : (1)59 An employee who pays the Fund
deduction to the Fund continuously for at least Five years may withdraw
such an amount from the Fund as may not be in excess of the Sixty percent
of the total amount deposited in his or her name.
49 Section 16 has already been repealed by Sixth Amend nt. 50 Amended by Third Amendment. 51 Amended by Sixth Amendment. 52 Deleted by Eighth Amendment. 53 Amended by Fifth Amendment. 54 Amended by Fifth Amendment. 55 Deleted by Fifth Amendment. 56 Deleted by Fifth Amendment. 57 Deleted by Fifth Amendment. 58 Amended by Sixth Amendment. 59 Amended by Eighth Amendment.

16
(2) Notwithstanding anything contained elsewhere in this Act, no
employee may withdraw amount from the Fund while he or she is in
service except in accordance with Sub-section (1).
(3) Once any employee has withdrawn amount pursuant to Sub-
section (1), he or she may not again withdrawn amount prior to the
completion of Two years after the date of such withdrawal.
14A.60Reconciliation of amounts: (1) Where any employee has taken an
advance from the Fund prior to the commencement of this Section, the
principal and interest due and payable by him or her out of the amount so
taken as advance shall be deducted from the Fund deduction amount
accumulated in his or her name and reconciliation of amounts shall be made
accordingly.
(2) If reconciliation of amounts is made pursuant to Sub-section (1)
and such an employee wishes to again withdraw amount from the Fund,
only the remaining amount to be set by deduction the already withdrawn
amount from the amount as referred to in Sub-section (1) of Section 14
shall be allowed for withdrawal.
Provided that, he or she shall not be entitled to again withdraw
amount prior to the completion of Two years after the date of withdrawal of
amount or taking advance from the Fund.
(3) If an employee who has borrowed the home loan from the Fund
wishes to have the reconciliation of amounts from the Fund deduction
amounts, he or she may have such reconciliation pursuant to Sub-section
(1).
60 Inserted by Sixth Amendment.

17
14B. 61 Amount withdrawn from the Fund may be returned: An employee
may at one time or at times return to the Fund the amount withdrawn
pursuant to Section 14. Interest and profits shall be provided pursuant to
Section 15 on the amount so deposited.
15.62 Interest and63 profits to be provided: (1) The Fund shall provide
interest on the amount deposited by the name of an employee at such a rate
as may be determined from time to time pursuant to Sub-section (2).
(2) In determining the rate of interest, the Fund shall determine it on
the basis of propriety having regard also to the total amount in his or her
custody, total amount of investment made therefrom, total amount of
interest or dividends receivable therefrom and administrative expenses.
(3)…………….64
(4) If, on evaluating the assets and liabilities of the Fund according
to the market value on the day of closure of the year in every fiscal year, it
is not sufficient to provide interest by Three percent per annum, the
shortfall amount as required to provide interest by that rate shall be
chargeable on the Consolidated Fund of the Government of Nepal.
(5)65 Even though an employee is relieved of office for any reason,
the Fund shall continue to provide interest on the amount deposited in the
Fund by the name of that employee unless and until the amount is
withdrawn from the Fund.
(6)66 The amount of profits that remains after setting aside the
amount pursuant to Section 25 from the amount standing as profits in the
61 Inserted by Sixth Amendment. 62 Amended by Third Amendment. 63 Inserted by Fifth Amendment. 64 Deleted by Sixth Amendment. 65 Amended by Fifth Amendment. 66 Amended by Sixth Amendment.

18
already audited annual statements of the Fund shall be ascertained in
accordance with the rate and procedures specified by the Board vis-à-vis
the amount deposited in the name of depositors by the beginning of the
financial year of the assessment of profits, and the ascertained amount shall
be credited to their accounts.
(7) …………….67
15A.68Fund deduction to be refunded: (1) Any employees shall get refund of
lump sum of all amounts including the principal and i terest deposited in
his or her account immediately when he or she is reliev d of service for any
reason. If he or she dies, his or her nominee or nomi ees shall obtain the
amounts according to the will. If he or she has not nominated any person or
if his or her nominee is also dead, the surviving relative of the employee
shall receive such amounts and if there are more than one such surviving
relatives in the same order,69 they shall receive such amounts on the pro
rata basis:
(a)70 Husband or wife living in the same family;
(b) Son, daughter, widow daughter-in-law living in the
same family;
(c) Father, mother (father-in-law, mother- in-law in case
of a married woman) living in the same family;
(d) Grandfather grandmother to be taken care of by
oneself and grandson, granddaughter on the line of the
son;
(e) Husband or wife living separately; 67 Deleted by Seventh Amendment. 68 Inserted by Third Amendment. 69 Inserted by Amending Some Nepal Acts to maintain Ge der Equality Act, 2063. 70 The Clauses (a) to (o) have be substituted for the existing Clauses (a) to (j) by Amending Some
Nepal Acts to maintain Gender Equality Act, 2063.

19
(f) Son, daughter, widow daughter-in-law living
separately;
(g) Father, mother living separately;
(h) Step son, daughter living in the same family;
(i) Step mother living in the same family;
(j) Elder and younger brother and elder and younger sister
living in the same family;
(k) In case of a married woman, father-in-law, mother- in-
law living separately;
(l) The grandson and unmarried grand-daughter in the line
of the son;
(m) The step mother living separately;
(n) Step son, daughter living separately;
(o) In case of a married woman, elder and younger
brother-in-law and sisters-in-law living in the same
family;
(p) Nephew, niece living in the same family;
(q) Uncle, widow aunt, elder sister-in-law, younger sister-
in-law;
(r) Elder and younger brother and elder and younger sister
living separately;
(s) Grandfather, grandmother, granddaughter-in-law,
nephew, niece living separately;
(t) The person taking of the employee being close to him
or her until the last hour.

20
(1a)71 Any employee may nominate any person for the purposes of
Sub-section (1). The procedure of so nominating any person by the
employee shall be as specified by the Fund.
(2) If a person nominated by an employee dies or ifthe employee so
wishes despite he or she is alive, the employee maynominate another
person in his or her stead or alter the contents set forth in the letter of
nomination.
(3) If, after the discontinuation of the service of an employee, the
employee does not show up to get refund of the Fund amount or does not
give any notice to the Fund in relation to the refunding, his or her nominee
shall be entitled to his or her Fund amount. If even the nominee does not
show up to receive that amount until Two years Nine months after the date
on which he or she may get it, the Fund shall arrange to publish a notice for
information to the people generally. If the nominee does not show up to
receive the amount even within Three months of the dat of publication of
the notice,72 the heir to the employee as referred to in Sub-section (1) shall
be entitled to get that amount.
(3a)73 Notwithstanding anything contained in Sub-section (5) of
Section 15, if a person who is entitled to have the refund of the deposited
amount even until Six years after the original date on which such amount
has stood refundable, the amount shall be deposited in a separate account,
and after the amount is so deposited in a separate ccount, no interest shall
be payable on that amount.
(4) Notwithstanding anything contained in Sub-section (1), the Fund
shall ………….. 74deduct and recover such principal borrowed by an
71 Inserted by Sixth Amendment. 72 Amended by Fifth Amendment. 73 Inserted by Fifth Amendment. 74 Deleted by Sixth Amendment.

21
employee from the Fund and interest accrued thereon as may be due and
payable by the employee.
15B.75 To give notice to the Fund about the condition of employee: (1) In
the event of fresh appointment, transfer and promotion of employees, the
office issuing letter of such fresh appointment, transfer and promotion shall
give a notice thereof to the Fund immediately.
(2) If any employee is to get retirement due to agebar, the concerned
office or employee records office76 shall, in advance of Six months of
retirement, give a notice thereof to the Fund, setting out the date on which
the employee gets retirement.
(3) If any employee gets retirement or is relieved of office for any
other reason, the then office shall give a notice to the Fund, also setting out
the date of getting retirement or relieving of office for the purpose of
refunding the Fund deduction amount of the employee.
16. ……………………….77
17. Transfer of capital: (1) The capital and liabilities of the civil provident
fund, military monetary fund and employee's provident fund operated by
the Government of Nepal by the date prior to the commencement of this
Act shall be deemed to have been transferred to the Fund after the
commencement of this Act. The Government of Nepal sh l hand over the
records, documents relating to the capital and liabilities of these funds and
the business to be carried out under this Act to the Fund within Six months
after the commencement of this Act; and after so receiving the capital,
liabilities and concerned records and documents, moneys already in deposit
in the name of employees prior to the commencement of this Act shall be
75 Inserted by Third Amendment. 76 Amended by Sixth Amendment. 77 Repealed by Sixth Amendment.

22
deemed to have been deposited in the name of employees, and such moneys
shall be operated under this Act.
(2) In receiving the capital and liabilities pursuant to Sub-section (1),
if the Fund finds that all or some of the principal or interest or both out of
the capital invested by the civil provident fund, military monetary fund and
employee's provident fund cannot be recovered, the Fund shall be deemed
to have received such capital investment only by the price/value as valuated
by the Fund in relation to the capital and investment. Despite receipt by the
Fund of such capital, investment, such money as remaining shortfall in that
capital, investment shall be available to the Fund from the Consolidated
Fund of the Government of Nepal.
(3) Prior to receiving the capital, investment as held to be of lesser
value or unrecoverable pursuant to Sub-section (2), the Fund shall give a
report indicating the actual statements, condition f such capital,
investment and valuation thereof according to the market value, to the
Government of Nepal.
(4) Upon receipt of a report pursuant to Sub-section (3), the
Government of Nepal may send a directive to the Fund within Three
months that the Government of Nepal shall take over such capital,
investment, and that moneys of such capital and investment shall be
immediately available to the Fund from the Consolidate Fund of the
Government of Nepal. The Fund shall abide by such a directive.
18. Security of fund: Notwithstanding anything contained in the Nepal laws
in force, the following matters shall be governed by the following:
(a) No coparcener of an employee shall, in consideration for his or her
partition share, be entitled to the moneys deposited with the Fund in
the name of the employee. The employee shall not als be bound to

23
partition such moneys. Despite a judgment by a court, no creditor
shall be entitled to claim the moneys deposited with the Fund in the
name of the employee. No moneys deposited with the Fund in the
name of the employee shall be confiscated for any offences
including those punishable with confiscation of entire property
pursuant to the Nepal laws. Such moneys shall not als be deducted
or confiscated also for any government dues or arrears.
(b) No tax of any kind other than income tax78 shall be levied on the
moneys deposited with the Fund in the name of any employee and
on profits of the Fund and on the moneys deposited by the employee
upon drawing the same from the Fund out of the moneys so
deposited with the Fund.
(c) In distributing the assets of a company in which any amount of the
Fund has been invested or which has borrowed a loan fr m the Fund,
upon the liquidation of the company, the Fund shall ve the first
and foremost right in the assets of such a company for the
investment by the Fund, dividends thereon and outstanding and
recoverable amount of the loan. Even in cases where any amount of
the Fund is due and recoverable from any other person and such
person becomes insolvent, the Fund shall have the first and foremost
right in the assets of such a person for the amount t be recovered by
the Fund. Only after the recovery of the amount due and payable to
the Fund, other persons shall have the right in the remaining assets
of such a company or person.
78 Amended by Income Tax Act, 2058.

24
79Provided that, this provision shall not apply to loans
disbursed by the Fund on the basis of co-financing pursuant to
Clause (c2) of Section 19.
(d)80 If any industry, enterprise, body corporate or employee fails to pay
in time such advance, loan or interest as required to be paid to the
Fund in accordance in the deed, the Fund may recover the amount of
the Fund by foreclosing81and auctioning the house and land or other
property furnished by such an industry, enterprise, body corporate or
employee as a security or wealth guarantee82 in favor of the Fund
after Thirty Five days of the expiration of that time. If no one buys
such house and land on the auction sale, the Fund may take over the
ownership of that property. In such a circumstance, th government
offices responsible for maintaining the records of such property or
recovering the land revenue thereon shall do action whatever
required, including transmission, on the records maintained in these
offices, without charging any fee.
(e)83 After the Fund has taken a property as a security or wealth
guarantee84 pursuant to Clause (d) or Section 19A., the borrower
shall not furnish such a property as a security in favour of, or
usufruct it or otherwise transfer his or her title in it, to another
person, and if the registration making office is requ sted by the Fund
to withhold that person, the office shall withhold it.
79 Inserted by Eighth Amendment. 80 Inserted by Third Amendment. 81 Inserted by Fifth Amendment. 82 Amended by Fifth Amendment. 83 Inserted by Third Amendment. 84 Amended by Fifth Amendment.

25
(f) 85 The rate of interest to be taken and given by the Fund shall be as
specified by the Fund.
(g)86 In lending a loan or advance against the security of an immovable
property to any industry, enterprise, body corporate or employee, the
Fund may specify the repayment period of more than Five years.
(h)87 In lending a loan to an employee against a security or wealth
guarantee, the Fund shall lend the loan only after ascertaining that
the security or guarantee in any place within Nepal h s been
furnished in its favor. The method of valuating the property so
furnished as a security or wealth guarantee shall be as determined by
the Fund.
(i)88 If it is required to attach and auction the property furnished as a
security or wealth guarantee in the event of non-repayment of the
installments of principal and interest of a loan or advance lent or
paid by the Fund, the Fund may publish a notice in a local
newspaper, giving a time-limit of at least Thirty Five days and attach
and auction such a property after the expiration of that time-limit.
(j)89 The Fund shall not be required to pay revenue stamp fee or
registration fee with respect to a deed of any kind of transaction to
be done with it.
19.90 Powers of the Fund: The Fund shall have the following powers in
relation to the mobilization of its balance/inventories and assets:
85 Amended by Fifth Amendment. 86 Inserted by Third Amendment. 87 Amended by Fifth Amendment. 88 Inserted by Fifth Amendment. 89 Inserted by Fifth Amendment. 90
Amended by Third Amendment.

26
(a) To make investment in bonds of the Government of Nepal and
purchase and sell such bonds;
(b) To make investment in cash certificate fixed deposits of banks
within Nepal;
(b1)91 To make investment, against appropriate bank guarantee in cash
certificate fixed deposits of financial institutions within Nepal;
(c) To lend moneys to any industry, enterprise or bdy corporate,
against the guarantee of the Government of Nepal on such terms and
interest as specified by the Fund;
(c1)92 To make investment in shares of banks and financial institutions;
Provided that, in so making investment in shares, investment
shall be so made as not to exceed Twenty Five percent of the issued
capital of such a bank or financial institution.
(c2)93 Jointly supplying credits on the basis of co-financing, in such
areas as the Fund considers appropriate, in collaboration with
other banks or financial institutions established under the laws
in force in accordance with the mutual agreement enter d into
for the division of the collateral pari passu;
(c3) 94 To make investment in debentures issued by such companies or
bodies corporate incorporated pursuant to the laws in force as the
Fund considers appropriate;
Provided that, in so making investment in debentures,
investment shall be so made as not to exceed Twenty Five percent of
the issued debentures of such companies or bodies corporate.
91 Inserted by Eighth Amendment. 92 Inserted by Seventh Amendment. 93 Amended by Eighth Amendment. 94 Inserted by Eighth Amendment.

27
(d) 95 To operate housing projects solely by the Fund or in collaboration
with other institutions and directly or by installment sell, distribute
or rent houses and housing plots;
(d1) 96 To sell and distribute houses and housing plots or establish and
operate companies or institutions for the operation of housing
projects;
(e) To construct buildings and rent them;
(f) 97 To lend moneys to any companies or bodies corporate incorporated
pursuant to the laws in force, by specifying terms and interest,
against the guarantee of any banks or financial institutions
established under the laws in force;
(f1) 98 To make investment in such areas as the Fund considers appropriate,
against adequate security or guarantee, by obtaining approval of the
Government of Nepal;
(f2) ……………….99
(f3) 100 In the event of receiving by the Fund of any assets b longing to any
institution for any outstanding loan lent by the Fund, to operate that
institution solely or in collaboration with any other institution or
establish a new institution for the utilization of the assets;
(g) To do any acts in the interests of the employees, taking into
consideration of the security of the Fund, by obtaining approval of
the Government of Nepal;
95 Amended by Sixth Amendment. 96 Inserted by Sixth Amendment. 97 Amended by Eighth Amendment. 98 Amended by Eighth Amendment. 99 Deleted by Eighth Amendment. 100 Inserted by Sixth Amendment.

28
(h) To do all such other acts as may be incidental i the course of doing
acts as required to be done under this Act.
19A. …………….101
19B.102 Investment Promotion Committee: (1) The Fund shall have an
Investment Promotion Committee to determine investmnt policies and
make suggestions to the Board for making investment of moneys of the
Fund in such sectors which are safe and yield more ben fits/returns.
(2) The committee as referred to in Sub-section (1) shall consist of
the following members:
(a) The Administrator of the Fund -Chairperson
(b) One person nominated by the
Government of Nepal from amongst
financial experts engaged in the service
of the Government of Nepal


-Member
(c) Two persons nominated by the
Government of Nepal who have special
knowledge and experience in the filed of
investment promotion, form the
Tribhuvan University and public or
private sector



-Member
(d)103
One office employee of the Fund
designated by the Board
-Member
Secretary
101 Deleted by Sixth Amendment. 102 Inserted by Sixth Amendment. 103 Amended by Eighth Amendment.

29
(3) The tenure of office of the members nominated pursuant to Sub-
section (2) shall be Three years.
(4) Notwithstanding anything contained in Sub-section (3) the
Government of Nepal may, at any time, alter the memb rs so nominated.
(5) The meeting allowance to be received by the chairperson and
members of the Investment Promotion Committee for taking part in
meetings of the Investment Promotion Committee shall be as specified by
the Board.
(6) The administrator shall call the meeting of the Investment
Promotion Committee as required.
(7) Other matters relating to the meeting of the Investment
Promotion Committee shall be as determined by the committee itself.

20. Prohibited acts: The following are prohibited from being done by the
Fund:
(a) To pay any advance from the Fund whether or not taking any
security or guarantee, other than any advance to bepaid in the course
of daily and travel allowance for the purpose of the business of the
Fund and any advance to be given to and taken from any director of
the Board in accordance with the rules framed under this Act; to lend
moneys against the guarantee of the residual of a trust land.
104Provided that, nothing in this provision shall be deemed to
bar the paying of the same loan and advance as may be lent to other
depositor employees of the Fund.
(b) ………………..105
104 Inserted by Eighth Amendment.

30
(c)106 To make investment in the shares or debentures of any bank,
financial institution, company or body corporate incorporated
pursuant to the laws in force or lend moneys against the security of
such shares or debentures, in any other manner, except in cases as
set forth in Clauses (c1), (c2) or (c3) of Section 19.
Chapter-4
Accounts and examination thereof
21.107 Annual accounts: The Fund shall submit to the Government of Nepal the
balance sheet and annual profit and loss account sig ed by the chairperson,
any director or administrator and chief office and certified by the Auditor
General within Nine months after the completion of each year, in such
format and manner as specified by the Auditor General.
22.108 Annual report : The Fund shall submit to the Government of Nepal an
annual report on the activities carried out by the Fund throughout the year,
within Nine months after the completion of each year.
23.109 Accounts and audit of the Fund: (1) The accounts of the Fund shall be
maintained in such form as specified by the Auditor General of Nepal, on
the advice of the Fund.
(2) The accounts of the Fund shall be audited by the Auditor General
of Nepal.
(3) On the completion of audit, one copy of a report setting out the
following matter shall be submitted to the Fund ando e copy thereof to the
Government of Nepal:
105 Deleted by Sixth Amendment. 106 Amended by Eighth Amendment. 107 Amended by Fifth Amendment. 108 Amended by Third Amendment. 109
Amended by Third Amendment.

31
(a) Whether the matters to be mentioned in the profit and
loss account prepared by the Fund have been
mentioned or not and whether the account reflects the
actual financial condition of the Fund or not;
(b) Whether accounts are in order in accordance with th s
Act or not, and whether responses to queries made are
satisfactory or not.
(4) It shall be the duty of each director and employee of the Fund to
render assistance to allow such accounts for inspection as intended to be
inspected by the Auditor General in the course of audit and give responses
to all questions asked.
Chapter-5
Miscellaneous
24. Provision of investigation: The Fund may provide for research in order
to bring about reform in the economic condition of employees, and the
Fund may submit a report, along with its opinion on the statistics obtained
from such research, to the Government of Nepal.
25.110 Profits may be deposited in various funds to be established: (1) The
Fund shall provide for depositing such amount out of the profits remaining
balance at the end of every financial year as may be prescribed in a reserve
fund, welfare fund, pension fund and similar other fund as prescribed.
(2) The procedures of spending the amount of profits deposited in
the fund established pursuant to Sub-section (1) and other procedures fro
the operation of such funds shall be as prescribed.
110 Amended by Eighth Amendment.

32
26. Saving of officials against loss and damage: The administrator,
assistant administrator, director, officer or other employees of the Fund
shall not be held individually liable for any loss or damage caused or to be
caused from any act done by them in the course of performing their duties
in accordance with this Act, except for any act done with ulterior motive or
in bad faith deliberately.
27. Dissolution: If the Board is of the opinion that the Fund has to be
dissolved for any reason, the Board shall submit to he Government of
Nepal a report setting out the reason for the same, nd after such a report is
made, the Government of Nepal may dissolve the Fund, pon assuming all
liabilities of the Fund. The manner of dissolution shall be as specified by
the Government of Nepal.
28.111 Restriction on director, administrator and other employee of the
Fund: No director, administrator and other employee of the Fund shall not
be allowed to take any contract from or to be a partner in any contract with
the Fund.
Explanation: The said officer and employee shall be deemed to be
a partner in any contract:
(a) If his or her name is included as a partner in any
contract with the Fund, on behalf of him or her or of a
company in which he or she is a managing director or
agent, or
(b) If he or she is a shareholder of any firm or private
limited company which is a partner in any contract to
be made with the Fund.
111
Amended by Third Amendment.

33
29. Penalties: (1) If a person knowingly inserts any false matter or causes the
insertion of such false matter in any document held in the Fund under this
Act, that person shall be liable to the punishment of imprisonment for a
term not exceeding Two years or a fine of up to Two Th usand Rupees or
with both punishments, and if the Fund has suffered any loss or damage
from the act of that person, the Fund shall also rec v r the amount of such a
loss or damage from that person.112
(2)113 If any director, administrator or other employee of the Fund
takes a contract from the Fund or becomes a partner in a contract with the
Fund, such a director, administrator or employee shall be liable to the
punishment of imprisonment for a term not exceeding Two years or a fine
of up to Five Thousand Rupees or with both punishments.
(3) If any person obstructs the auditor designated by the Auditor
General114 in the performance of his or her duties or does not pr vide such
document as demanded by him or her pursuant to lawswithout any
reasonable reason, such a person shall be liable to the punishment of a fine
of up to One Thousand Rupees.
(4) ………..115
30. Power to frame Rules: (1) The Fund may frame Rules in order to
accomplish the objectives of this Act. These Rules shall not come into force
without being approved by the Government of Nepal.
(2) Without prejudice to the generality of power conferred by Sub-
section (1), Rules may be framed particularly on any or all of the following
matters:
112 Inserted by Third Amendment. 113 Amended by Third Amendment. 114 Amended by Fifth Amendment. 115 Repealed by Administration of Justice Reforms (Fourth Amendment) Act, 2043.

34
(a) With respect to the manner of performance of
functions by the Board and the Rules of procedures of
the meeting of the Board;
(b) With respect to the delegation of powers by the Board
to the administrator and by the administrator to his or
her subordinator officers and other employees;
(c) With respect to the appointment, promotion, transfer,
dismissal, salary, allowance, pension, gratuity, leave,
conduct, discipline as well as conditions of service
and formation of the service of the officers and other
employees of the Fund;
(d) With respect to the terms of lease and bond to be
exercised on behalf of the Fund without contravening
the Nepal laws in force;
(e) With respect to the procedures of making the seal of
the Fund;
(f) ……………..116
(g) With respect to the issuance of new identity cards to
the employees in cases where their identity cards ae
lost, defaced or torn out or obliterated to be illeg ble;
(h) With respect to the making of investment by the Fund;
(i) With respect to the well-arrangement of all affairs to
be generally carried out by the Fund under this Act.
30A.117 Power to frame Bye-laws: The Fund may frame necessary Bye-laws,
without being prejudicial to this Act or the Rules framed under this Act.
116 Deleted by Seventh Amendment.

35
30B.118 Saving: Notwithstanding anything contained in the Lands Act,
2021(1964), the upper ceiling shall not apply to any land acquired for the
operation of a housing project by the Fund.
31. When this Act is inconsistent with other Nepal laws:
Notwithstanding anything contained in the Nepal laws in force, the matters
set forth in this Act or the Rules framed under this Act shall be governed by
the same and the other matters shall be governed by the Nepal laws in
force.
32. …………….119
117 Inserted by Fifth Amendment. 118 Inserted by Fifth Amendment. 119 Deleted by Some Nepal Acts Amendment, Repeal and Continuance Through Re-arrangement Act,
2019.