NBL, RBB CEOs’ appointment process resumes
The stalled process of appointing chief executive officers of Nepal Bank Limited (NBL) and Rastriya Banijya Bank (RBB) has resumed, with the central bank deciding to entrust the CEOs selection job to a high level committee as per the directive of the Parliament’s Finance Committee.
The high level committee includes a deputy governor of the Nepal Rastra Bank (NRB), a government secretary, a representative from the Institute of Chartered Accountants of Nepal and a university professor.
Earlier, the central bank had formed a relatively lower level selection committee including an NRB director, a joint secretary and three board members of each bank. However, lawmakers directed the NRB to form a high level selection committee. With discussions in the Parliamentary committee delaying the appointment process, the central bank’s earlier plan of appointing CEOs by mid-April could not be materialised.
The NRB has already granted the right to appoint CEOs to the boards of the banks. “We have already directed the banks to start the appointment process immediately as per the Parliamentary committee’s directive,” said Bhaskarmani Gyawali, spokesperson for NRB.
The banks will now announce vacancy for CEOs. “We have already written to the offices concerned to send representatives for the high level committee,” said a senior NBL official. “We will soon announce vacancy for a CEO.”
Currently, NBL runs under a management group appointed by the central bank. The group is headed by NRB Director Maheshwor Lal Shrestha. Likewise, RBB Chairman Ram Prasad Adhikari has been functioning as managing director of the bank for the last two weeks after the contract of the bank’s CEO Janardan Acharya was terminated in March-end. Acharya’s tenure came to an end after the expiration of a component of the financial reform programme which was contributing the CEO’s salary. With the financial sector reform programme expiring in December, the central bank is under pressure to appoint CEOs in these banks. NRB’s previous five previous attempts of appointing CEOs of the banks could not yield positive results. In every successive attempt, the central bank had been easing the eligibility criteria. “However, we have not made any changes to the criteria that were set while telling the banks’ boards to appoint CEOs three months ago,” said Gyawali.
According to the criteria, a candidate should have already worked as chief executive of a bank for two years or deputy CEO for four years. If a bank employee has worked as chief of a certain bank department for six years or at managerial level for eight years, s/he is eligible for the post. However, candidates should have a Master’s Degree in business or economics or they should be chartered accountants.
After the appointment, new CEOs will have to formulate and implement a recapitalisation plan and turn the banks into healthy financial institutions within two years, as per the terms of references fixed for upcoming CEOs. The CEOs are also expected to maintain the overall non-performing loan (NPL) below 5 percent and NPL for good loan below 1 percent.
Posted on: 2011-04-18 10:00
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