Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) has cautioned the Board of Directors of Saptakoshi Development Bank Limited for re-appointing independent directors against the provisions of the Bank and Financial Institutions Act.
According to the fourth quarter supervision report of the fiscal year 2081/82 made public by the Department of Financial Institutions Supervision, during the overall on-site inspection of the institution, it was found that the same person was re-appointed as an independent director for the second term even after the expiry of the first term of the independent director.
According to the NRB, the re-appointed independent directors have been found to have participated in the decision-making process of the organization by continuously attending the meetings of the Board of Directors. The report states that such act is against Section 15 (1) of the Bank and Financial Institutions Act, 2073.
Based on this weakness, Nepal Rastra Bank has directed the Board of Directors of Saptakoshi Development Bank not to repeat such activities in the future and warned the Board of Directors of Saptakoshi Development Bank in accordance with the Nepal Rastra Bank Act, 2058 BS. In addition, the financial institutions have been directed to fully comply with the legal and regulatory provisions.
