Academicians can be directors of Financial Institutions

KATHMANDU, MAY 09:

The central bank has allowed academicians involved with government owned universities to hold a position on board of any financial institution (FI).

Issuing a circular, Nepal Rastra Bank (NRB) has stated that there is no prohibition on appointing professors and assistant professors as a director in the governing board of any financial institution.

Back 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 central bank provision had created difficulty for employees of Tribhuwan University 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 NRB’s list include professors of government promoted Tribhuwan University.

According to Nepal Rastra Bank those professionals who 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.

Source: THT