Banking News – The government has initiated a process to amend the Banks and Financial Institutions Act (BAFIA) to qualify individuals who have received warnings or reprimands to become directors of banks and financial institutions. Finance Minister Dr. Swarnim Wagle informed the Finance Committee meeting on Monday that the amendment is being processed.

According to Minister Wagle, the existing provision in Section 18, Sub-section (1), Clause ‘d’ of BAFIA is being amended. Under the current provision, a person who has been penalized by the regulatory body for violating the law, or whose penalty period of five years has not yet expired, is disqualified from becoming a director of a bank or financial institution. The proposed amendment seeks to add a provision that the disqualification will not apply to individuals who have only received routine warnings or reprimands.

Minister Wagle stated that a separate BAFIA amendment bill would not be required for this change. The proposal has been forwarded through the “Some Nepal Laws (Amendment) Bill.” The Ministry of Finance has approved the proposal and sent it to the Ministry of Law. He also mentioned that making provisions only in the Nepal Rastra Bank Act would be insufficient, and thus it is appropriate to clearly provide for it in BAFIA itself. He also proposed taking at least 24 hours to further clarify and discuss the matter.