Banking Khabar / Nepal’s Supreme Court has scrapped a legal requirement that forced banks and financial institutions to sell foreclosed land within three years.
The Constitutional Bench ruled to strike down Section 12C of the Land Act 1964, removing the mandatory deadline. Previously, if a property taken as collateral remained unsold at auction, banks had to sell it within three years—or seek government approval if they failed to do so.
With this decision, banks are no longer bound by the three-year deadline, giving them greater flexibility in managing and selling foreclosed assets.
