Case filed against CIAA move

A case has been filed against the anti-graft body today claiming that interfere in the private banks and financial institutions does not fall under Commission for Investigation of Abuse of Authority (CIAA) jurisdiction.

An advocate Arjun Kumar Aryal has filed a case at the Supreme Court claiming that the CIAA has no right to seek information directly from the banks and financial institutions. "The CIAA move will not only have negative impacts on banks and financial institutions but also have adverse impact on overall economy," Aryal claimed, adding that the banks and financial institutions come under the central bank's jurisdiction. "Only Nepal Rastra Bank Act 2058 BS has the right to regulate the banks and financial institutions."

The CIAA has been trying to tame and terrorise the financial sector going out of its jurisdiction, he has claimed.

On Monday, a private sector representatives – including bankers – have met central bank governor DR Yubaraj Khatiwada and expressed serious concerns over the CIAA's demand of details about borrowers of banks and financial institutions.

They have informed the governor of adverse affect after the CIAA interference. "The CIAA move could affect domestic and foreign investment in the country," they have added.

The CIAA has been seeking details of loans, share ownership, foreign investment and exemption of penalty and interest amount to recover the loans, from about a dozen commercial banks.

The Bank and Financial Institution have provisioned that they should maintain the customers’ information secret, and the CIAA move will send negative message.
The central bank has also failed to resist the anti-graft body's move despite being an autonomous regulating authority of the banks and financial institutions.

Aryal claimed that clause 79 of the Bank and Financial Institution Act 2006 allows the banks and financial institutions to provide the details about accounts of a person, firm, company and institution and licensed institutions, if the Finance Ministry and the central bank direct them for any specific investigation by disclosing the reasons for demanding the information.

The CIAA has been seeking details from the government-owned banks directly, and private sector banks through the central bank about the borrowers that received loans over Rs 10 million.