State-run BFIs removed from purview of PEB

KATHMANDU, FEB 04 -

The government has put state-owned banks and financial institutions (BFIs) out of the jurisdiction of the Public Enterprises Board (PEB) and barred it from appointing their chief executives.

The Ministry of Finance has removed Rastriya Banijya Bank, Agricultural Development Bank, Nepal Bank and NIDC Development Bank from the list of public enterprises (PEs) where the PEB is authorized to carry out the selection process of the chief executive.

A senior ministry official said that they were removed from the list as there was a separate procedure for appointing their chief executives under the Bank and Financial Institution Act (Bafia).

The act allows the BFI Board to appoint the CEO based on it and the memorandum and article of association of the concerned organization. As per the criteria fixed for CEOs of BFIs, the candidate should hold a bachelors’ degree, have five years’ experience in banking and financial organizations in the post of executive and director. Meanwhile, a PEB official said that removing BFIs from its jurisdiction could encourage public enterprises such as Rastriya Beema Sansthan and Citizens Investment Trust to demand similar treatment.

The PEB was formed to select the chief executive of public enterprises on a competitive basis. The PEB selects three most eligible candidates from among the applicants and recommends their names to the government which selects one of them as the chief of any particular PE.

However, the PEB has not been able to assess the qualifications of candidates for a number of PEs as its authority has been challenged at the Supreme Court.

According to PEB Chairman Bimal Wagle, the court has set the date for a hearing on the case for March 6. After the court halted the selection process by issuing an interim order on Sept 5, 2013, the selection process of the chief executives for four public enterprises has stopped. The PEB has not been permitted to issue vacancy notices for PEs too.

The PEB has been barred from moving ahead with the selection process of the chief executive for Agriculture Inputs Company, National Seeds Company, Timber Corporation and Herbs Production and Processing Company despite having collected applications from candidates.

“Likewise, we have been requested by Udayapur Cement Factory, Dairy Development Corporation, Citizens Investment Trust and Hetauda Cement to issue vacancy notices for their chiefs,” said Wagle. He also suggested that the government send a first class officer (joint secretary level) to become the chief executive at headless PEs until the court makes up its mind, which could be a long time.

Last year, the government revised the PEB Formation Order making it possible to send one of its first class officers to act as the boss until a new CEO is appointed through free competition. “A few PEs including the Nepal Electricity Authority have got their executive heads under this provision,” said Wagle.

Source: The Kathmandu Post