Wednesday, May 8, 2013

Central bank allows academicians to be directors of banks and financial institutions

The central bank has allowed academicians involved with government owned universities to hold a position on the board of banks and financial institution.
Nepal Rastra Bank (NRB) today said that there is no prohibition on appointing professors and assistant professors as directors in the governing board of any banks and financial institution.
Earlier in February, the central bank had forbidden incumbent employees of any government body, public enterprise or any educational institution being run by the government to be a director of any licensed financial institution.
The provision had created difficulty for employees of Tribhuwan University (TU) holding the position of professors or assistant professors to be involved in the board of financial institutions.
The Banks and Financial Institutions Act requires a financial institution to have an expert director on its board and most of the experts in the Nepal Rastra Bank’s list include professors of government promoted Tribhuwan University (TU).  “Those professionals that have obtained at least a master’s degree in management, banking, finance, money, economics, commerce, trade, administration, commercial law or who have an accounting or commercial law or a chartered accountancy degree and have at least five years of experience at the executive level in the banking and finance field can be considered as professional directors.”
The board of any financial institution needs to comprise of not less than five and not more than nine directors, according to the Banks and Financial Institutions Act.

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