Remove Provision of Independent Directors in BFIs: Experts

June 16: Former NRB Governor Bijay Nath Bhattarai stressed on removing provision of independent directors from boards of Banks and Financial Institutions (BFIs). According to him, independent directors do not make any innovative contributions  to the BFIs besides earning allowances. Bhattarai made such remarks at  a program on the BAFIA Bill held in the capital jointly organised by Nepal Financial Association and South Asia Watch on Trade Economics and Environment (SAWOTEE). He added “BAFIA should restrict businessmen of particular category from opening banks who want to turn banking into quick profit making business.”

In the program, most speakers demanded NRB to become more strict to regulate BFIs. Speakers in the program stress on the need to make the central bank powerful enough to take decisions as per the changing context of banks to make banking sector powerful. Dr Ramsharan Mahat, Former Finance Minister, Upendra Poudel, Chairman of Nepal Banker’s Association, Former Governor Bhattarai and Shovan Dev Pant, CEO of Lumbini Bank were some of the speakers who gave such opinion.

The speakers stressed on amendments of weak points of BAFIA bill that has been submitted in parliament after endorsement of Financial Committee. Stakeholders expressed concern on topics such as tenure of Chairman and Director of BFIs, conversion period of promoters’ share into general shares and   direct involvement of self-interested parliamentarians in changing important mechanism in the bill.