After a long debate on the retirement provision, the central bank has proposed to remove the 30-year service period from the Nepal Rastra Bank (NRB) Employees’ Bylaws and make uniform retirement provision for all.
The board of directors meeting of the central bank on Sunday has decided to retain a single provision regarding retirement of NRB employees at the age of 58. According to the existing Employees’ Bylaws, NRB employees will be retired based on age factor and completion of 30-year service period, whichever comes first.
The central bank has proposed to remove the 30-year service period provision citing that a large number of experienced staff will be retired by next year under the provision and it wants to retain them.
It will also bring uniformity in retirement provision at par with civil servants, said central bank deputy spokesperson Rajendra Pandit, who also informed that the central bank has also formed a committee that will suggest on professional development of the NRB staffers as according to the federal structure of the country.
The central bank has sent the proposal to the Public Service Commission (PSC), which is the constitutional body that is mandated to select meritorious candidates for the government, he said, adding that altogether 233 officer-level – including special class, first class, second class and third class – staffers will be retired by next year as they will meet the 30-year service period despite having few years left before they meet the compulsory retirement age. It will also be the loss to the central bank as it will not only lose its experienced staff but will also have to pay some Rs 200 million extra.
The number of staffers to be retired by next year is one-fourth of the total staffers of the central bank, he said, adding that the new entry has to be taken immediately. "If the commission is unable to finalise selection process on time, the remaining staffers, even those who do not meet the promotion criteria, will automatically get promoted," according to the central bank. "Keeping the 30-year provision will not only increase pension liability but also lose trained human resources."
According to the NRB Employees’ Bylaws, a central bank staff, who retires after completing 30 years of service will get one layer promotion along with monthly pension calculated as per the last salary scale multiplied by service period plus remaining age before turning 60, divided by 50.
The central bank currently has a workforce of around 1,125 people. Of these people, 385 are retiring in the next three years. Majority of these employees are retiring because they have completed 30 years of service. Likewise, a total of 2,700 former central bank staffers are receiving pensions at present.
The Employees Union has been opposing the central bank move claiming that it will bar fresh blood from entering the NRB – in contradiction to the spirit of the Financial Sector Reform Programme (FSRP) – and the employees of government banks will also seek uniformity in retirement with the central bank. The 30-year service period provision was introduced in the central bank – under the FSRP – from 2000 aiming at mainly to inject fresh blood in the central bank to strengthen its regulation and supervision capacity and to improve the quality of service. The provision was also introduced in government banks – Rastriya Banijya Bank, Agricultural Development Bank and Nepal Bank – under the FSRP funded by World Bank.
The Employees Unions have, however, launched a protest to oppose the central bank move. They have today picketed the Governor’s Office two hours and shut down many branch offices for one hour. We will shut down all branches of the NRB for one hour and picket the Governor’s Office tomorrow also, said general secretary of the Nepal Financial Institutions Employees Association, a trade union close to the Nepali Congress, Rajiv Regmi.
Of the three trade unions at the central bank – Nepal Rastra Bank Employees Association, which is close to the CPN-UML; National Employees Organisation, which is close to CPN (Maoist Centre) and Nepal Financial Institutions Employees Association, which is close to the Nepali Congress – only National Employees Organisation is in favour of the central bank move, while the remaining two have denounced it.
Central Bank former governor Dr Yuba Raj Khatiwada had formed a committee led by then board member Dr Parthibeshwor Timilisina, who had advised to scrap 30-year provision. But Dr Khatiwada retired before implementing the suggestion.
The board of directors meeting of the central bank on Sunday has decided to retain a single provision regarding retirement of NRB employees at the age of 58. According to the existing Employees’ Bylaws, NRB employees will be retired based on age factor and completion of 30-year service period, whichever comes first.
The central bank has proposed to remove the 30-year service period provision citing that a large number of experienced staff will be retired by next year under the provision and it wants to retain them.
It will also bring uniformity in retirement provision at par with civil servants, said central bank deputy spokesperson Rajendra Pandit, who also informed that the central bank has also formed a committee that will suggest on professional development of the NRB staffers as according to the federal structure of the country.
The central bank has sent the proposal to the Public Service Commission (PSC), which is the constitutional body that is mandated to select meritorious candidates for the government, he said, adding that altogether 233 officer-level – including special class, first class, second class and third class – staffers will be retired by next year as they will meet the 30-year service period despite having few years left before they meet the compulsory retirement age. It will also be the loss to the central bank as it will not only lose its experienced staff but will also have to pay some Rs 200 million extra.
The number of staffers to be retired by next year is one-fourth of the total staffers of the central bank, he said, adding that the new entry has to be taken immediately. "If the commission is unable to finalise selection process on time, the remaining staffers, even those who do not meet the promotion criteria, will automatically get promoted," according to the central bank. "Keeping the 30-year provision will not only increase pension liability but also lose trained human resources."
According to the NRB Employees’ Bylaws, a central bank staff, who retires after completing 30 years of service will get one layer promotion along with monthly pension calculated as per the last salary scale multiplied by service period plus remaining age before turning 60, divided by 50.
The central bank currently has a workforce of around 1,125 people. Of these people, 385 are retiring in the next three years. Majority of these employees are retiring because they have completed 30 years of service. Likewise, a total of 2,700 former central bank staffers are receiving pensions at present.
The Employees Union has been opposing the central bank move claiming that it will bar fresh blood from entering the NRB – in contradiction to the spirit of the Financial Sector Reform Programme (FSRP) – and the employees of government banks will also seek uniformity in retirement with the central bank. The 30-year service period provision was introduced in the central bank – under the FSRP – from 2000 aiming at mainly to inject fresh blood in the central bank to strengthen its regulation and supervision capacity and to improve the quality of service. The provision was also introduced in government banks – Rastriya Banijya Bank, Agricultural Development Bank and Nepal Bank – under the FSRP funded by World Bank.
The Employees Unions have, however, launched a protest to oppose the central bank move. They have today picketed the Governor’s Office two hours and shut down many branch offices for one hour. We will shut down all branches of the NRB for one hour and picket the Governor’s Office tomorrow also, said general secretary of the Nepal Financial Institutions Employees Association, a trade union close to the Nepali Congress, Rajiv Regmi.
Of the three trade unions at the central bank – Nepal Rastra Bank Employees Association, which is close to the CPN-UML; National Employees Organisation, which is close to CPN (Maoist Centre) and Nepal Financial Institutions Employees Association, which is close to the Nepali Congress – only National Employees Organisation is in favour of the central bank move, while the remaining two have denounced it.
Central Bank former governor Dr Yuba Raj Khatiwada had formed a committee led by then board member Dr Parthibeshwor Timilisina, who had advised to scrap 30-year provision. But Dr Khatiwada retired before implementing the suggestion.
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