Kathmandu, August 13
The Supreme Court today directed Nepal Rastra Bank not to implement its earlier decision to set the age limit for board of directors and chief executive officers of banks and financial institutions.
Issuing an interim order in response to a writ petition filed by Narayan Das Manandhar, acting CEO of Prime Commercial Bank, against the NRB’s decision, the single bench of Chief Justice Cholendra Shumsher JB Rana today ordered the central bank not to implement its decision to fix age limit for BoDs and CEOs of BFIs.
The NRB had issued a circular last week barring BFIs from appointing or reappointing CEOs who are above 65 years of age. The new NRB rule had barred CEOs from continuing work in BFIs after crossing 69 years of age. The NRB had set age limit of 70 years for BoDs in BFIs and barred BoDs from continuing in the same capacity beyond 75 years of age.
Following implementation of the NRB’s age bar provision, Manandhar of Prime Commercial Bank was given forced retirement from the executive post of the bank. However, Manandhar filed a case against NRB’s directive regarding the age bar limit for CEOs, arguing that one should not lose his/her job merely due to the age factor.
In response to Manandhar’s writ petition, SC has not only directed the central bank not to implement its age bar provision for CEOs and BoDs of BFIs, but also directed that Manandhar be reinstated to his earlier post.
Against the backdrop of Banks and Financial Institutions Act 2017 and Nepal Rastra Bank Act 2002 only having provision regarding minimum age limit for CEOs in BFIs, the apex court has stated that the NRB’s decision to set age limit for CEOs at BFIs ‘seemed against the law.’
“Hence, the decision to set the age bar for CEOs and BoDs at BFIs has violated people’s constitutional rights to be engaged in occupation or employment,” the SC said.
Article 17 (2) of the Constitution of Nepal ensures people’s freedom to engage in any occupation or be engaged in employment, establishing and operating industry, trade or business in any part of Nepal. Moreover, the SC has also issued a show cause notice to NRB on its decision to set age limit for CEOs and BoDs at BFIs within 15 days from today.
Written by Sureis
This news first appeared on https://thehimalayantimes.com/business/supreme-court-lifts-age-limit-for-bods-ceos-at-banks-and-financial-institutions/ under the title “SC lifts age limit for BoDs, CEOs at BFIs”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.