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Lawmakers protest NRB’s circular barring people’s representatives from running banks

File image: Nepal Rastra Bank

Kathmandu, August 22

Lawmakers have protested the central bank’s recent circular to bar people’s representatives elected at local, provincial or federal level from joining the board of directors of banks and financial institutions.

Whereas Nepal Rastra Bank claims that the circular was issued in line with provisions of the Banks and Financial Institutions Act, lawmakers have said the directive was against sentiments of the law as it violated a person’s right to freedom and provisions of Consumer Protection Act.

Speaking at a meeting of the Legislation Committee in Parliament today, chief of a sub-panel formed to deal with the issue, lawmaker Rewati Raman Bhandari, said, “Legal explanations about constitutional positions are yet to be finalised. But, how can you bar local level representatives from joining the board of any bank?”

In response, NRB Governor Chiranjibi Nepal said, “There can be conflicts of interest if those holding constitutional positions will be in the board of directors. Likewise, it may affect the loan investment and might push banks and financial institutions to trouble.”

Meanwhile, the meeting could not take any concrete decision today. It is very likely that the House committee will direct the NRB to issue such directive only after preparing sufficient legal grounds as it is not in the position to scrap the directive.

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