Kathmandu, July 24

Nepal Rastra Bank has barred the local and provincial representatives from joining the board of banks and financial institutions during their tenure.

Issuing a circular today, the central bank stated that presence of elected representatives on the board of the BFIs could weaken the governance of the BFIs, as elected representatives are very likely to indulge in

power play.

The NRB provision bars even ward members from joining the BFIs’ board.

Earlier, the Banks and Financial Institutions Act had barred lawmakers from representing the board of BFIs. The central bank had lobbied to bring the provision to bar lawmakers from joining BFIs board.

The BAFI Bill submitted to the Parliament after necessary revision in the draft bill was returned to the House panel again after the lawmakers were criticised for removing the provision barring lawmakers from joining the board of BFIs. Subsequently, the finance committee had again submitted the bill incorporating the earlier provision that barred lawmakers from joining the BFIs’ board.

Following the enactment of BAFIA, some parliamentarians, who were on board of BFIs, had resigned from the concerned BFIs.