Kathmandu, April 27

The Supreme Court has issued a verdict in favour of Nepal Rastra Bank (NRB) — the central regulatory and monetary authority — stating that the central bank can fix the term of the chairman, board of directors and chief executive officer of banks and financial institutions (BFIs).

Issuing a final verdict on Tuesday on a writ filed in the Supreme Court some two years back following the NRB’s directives on the term of the chairman, board of directors and CEO of BFIs, the apex court has said that the central bank can fix the term for the aforementioned positions. The then governor of the central bank, Yubaraj Khatiwada, had issued the directives in 2015 stating that the chairman and CEO of BFIs will be allowed a tenure of only two terms of four years each to improve the corporate governance of the banks and financial institutions.

The Bank and Financial Institutions Act (BAFIA), 2006, was prevailing when the writ was filed in March, 2015, citing the directives were against the BAFIA-2006 and the Companies Act of 2006. However, the verdict of the apex court in favour of the central bank has provided more teeth to the regulatory body.

The recently amended BAFIA-2017 has fixed a provision of two terms of four years each for the executive chairman and CEO of BFIs. However, according to experts, the Supreme Court verdict has set a precedence that the central bank can issue directives to fix the tenure of the chairman and board of directors though the recently enacted BAFIA has no provision for the tenure of chairman. Some lawmakers, who also hold positions of bank chairmen, had used their influence to remove the two ‘four-year’ terms provision for a bank chairman in the draft bill before it was submitted to the Parliament by the Finance Committee of the Legislature-Parliament.

Central bank marks 62nd anniversary

KATHMANDU: Nepal Rastra Bank (NRB), on Thursday, marked the 62nd year of its establishment. On the occasion, the central bank honoured the designer of the Nepali coin, culturist Satya Mohan Joshi. Former governor Bhesh Bahadur Thapa was also felicitated for his contribution. Nepal Rastra Bank also felicitated former executive directors of the central bank. The central bank also provided medals to 175 employees who have worked at NRB for 20 years.