Central bank governor dissatisfied with apex court’s verdict

Kathmandu, August 31: Nepal Rastra Bank (NRB) Governor Chiranjibi Nepal has expressed dissatisfaction over the decision of Supreme Court (SC) to stay central bank’s decision to impose age limit for chief executive officers (CEOs) of banks and financial institutions (BFIs).

Addressing a programme organised by National Banking Institute (NBI) here today, Nepal said bankers have no right to use public money (deposits) as per their wish and that the age bar for bankers was necessary to secure public deposits in banks.

The central bank had issued a circular in first week of August barring BFIs from appointing or reappointing CEOs above 65 years of age.

The new rule had barred CEOs from continuing work in BFIs after crossing 69 years of age. However, the apex court had issued an interim order in response to a writ petition filed by Narayan Das Manandhar, then acting CEO of Prime Commercial Bank, against NRB’s decision.

A single bench of Chief Justice Cholendra Shumsher JB Rana had ordered the central bank not to implement its decision citing that setting the age bar for CEOs and board of directors at BFIs is against constitutional right of people to be engaged in occupation or employment.

However, Governor Nepal stated that BFIs are not private properties of board of directors and CEOs, as majority of investment in BFIs is from the general people.

“As we have been imposing age limit of 58 years in the public sector for those who have been receiving salary out of taxes paid by public, there has to be age limit for CEOs and board of directors,” opined Nepal.

As per him, the practice of handing over business to the next generation has to be stopped in the BFI sector to promote its healthy growth.

Citing that NRB has been taking far-sighted decisions to ensure growth and sustainability of financial sector, Nepal urged BFIs to comply with NRB’s directions.

Gyanendra Dhungana, president of Nepal Bankers’ Association, said that CEOs are not working solely for the benefit of the board of directors and are, in fact, highly inclined towards the public.