February 26: Lawmakers of the main opposition Nepali Congress have raised objection to the provision of setting an age limit and qualification requirement for directors of banks as proposed in the first amendment to the Bank and Financial Institution Act (BAFIA).

Speaking at a meeting of the House of Representatives on Tuesday, members of parliament from the main opposition party criticized the government for making an attempt to exert undue pressure and control the private sector by amending the BAFIA.

Presenting the BAFIA (first amendment) in parliament, Finance Minister Yuba Raj Khatiwada said that the government has proposed strict criteria in meeting the qualification requirement and age limit for the directors of BFIs in order to ensure the safety of Rs 3.5 trillion deposited by the public.

He argued that the age limit and qualification requirement were proposed to set a clear demarcation between bankers and businessmen.

As soon as Khatiwada presented the act for amendment, Nepali Congress lawmaker Rajendra Kumar KC objected to the provision of age bar for directors arguing that the shareholders do not require age limit while those representing the general shareholders will be barred from joining the board of directors of BFIs.

“The private sector will be discouraged if the government exerts too much pressure,” he said.

“We want a balanced and disciplined banking system. It is surprising that there is no age limit to become a shareholder of private banks but there will be restrictions to represent those shareholders in the board,” he added.

He said that the strict criteria set by the government is likely to allow employees of the central bank joining board of directors of private banks.

Another NC lawmaker Dibya Mani Rajbhandari asked if the constitution has not set an age limit for elected people’s representatives why is the government proposing age limit for directors of banks?

“It is not morally correct to snatch away the rights of shareholders. If there is not qualification requirement for lawmakers then why should we have such criteria for shareholders?” he questioned.

Likewise, another NC lawmaker Umesh Shrestha said that the flow of capital is taking place due to private banks. In such scenario, the government’s attempt to tighten the screws on the private sector might backfire.