Nepal | April 04, 2020

BFIs against mandatory participation in social scheme

Himalayan News Service

Kathmandu, December 15

Banks and financial institutions (BFIs) have expressed their reservations on joining the Social Security Fund (SSF) of the government and the recent direction from Nepal Rastra Bank (NRB) to join the social security scheme.

As BFIs were reluctant to join the social security scheme of the government citing biasness in policies for private and government firms, the central bank last week had directed BFIs to join the social security programme mandatorily.

However, members of the Nepal Financial Institution Association (NFIA) — association of people working in banks and financial institutions of the country — have threatened to launch protests if the central bank does not roll back its direction compelling BFIs to participate in the social security scheme.

“The regulatory body has issued such a circular without consulting BFIs. Moreover, directing BFIs to join the social security scheme of the government is not under the jurisdiction of the central bank,” reads a press statement issued by NFIA, adding that financial institutions will not join the social security programme as the programme does not ensure basic rights of workers in the financial sector.

“We will be compelled to start protests if NRB does not roll back its direction,” the statement adds.

The government had set the deadline of November 30 for the private sector to get listed in its ambitious scheme which will provide pension to retired employees of the private sector as well. However, government is on verge of extending the deadline as participation of institutions, especially BFIs in this scheme has not been encouraging.

Moreover, commercial banks have expressed their concern on the unclear policies adopted in the social security scheme for employees. “Undoubtedly, the social security scheme is a good programme. However, bank employees have not been ensured basic facilities that they should get thus discouraging us to immediately join the scheme,” said Bhuvan Dahal, chief executive officer of Sanima Bank.

“We are already registered at the Employees Provident Fund and Citizen Investment Trust.

Hence, why should we join the social security scheme of the government if we are not ensured of facilities that we have been already getting through these agencies?” questioned Dahal.

Primarily, bankers have been demanding that the government include insurance policy for dependent family members of the banking staffers. Likewise, they are also demanding that mandatory registration of staffers in the Social Security Fund be implemented only for those who had joined the institution after the fund was established.

Dahal, who is also the newly elected president of Nepal Bankers’ Association (NBA), informed that NBA will soon hold a meeting with NRB and convince the central bank about the concerns of the banks regarding the social security programme.

So far, 131,577 workers and 11,797 employers have been listed in the social security scheme.


A version of this article appears in print on December 16, 2019 of The Himalayan Times.


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