They said such provisions in the BAFIA would paralyze the functions of related authorities, including the Nepal Rastra Bank (NRB). [break]
A sub-committee of the Parliament´s Bills Committee (PBC) formed for amendment to BAFIA had invited former governors and representative from Bankers´ Forum and Institute of Chartered Accountants´ of Nepal (ICAN) for suggestions over proposed amendments on Monday.
The stakeholders also asked the lawmakers to aware of some provisions in the draft amendment, which they said, could crash the stock market.
Former governor of NRB Dr Tilak Rawal said it would be better not to fix exact figures in the Act as it is the prerogative of the concerned authority. Referring to provisions related to limiting salary of CEOs to four-fold of the average salary of employees, Rawal said the central bank can instruct banks and financial institutions revise salary structure if it deems necessary.
Another former governor Bijayanath Bhattarai said the country´s share market was already in gloom due to capital flight and provisions that discourage big promoters could further worsen the situation.
One of the amendments states that promoters of BFIs, who are also industrialist or businesspersons, can hold up a maximum of up to five percent of shares.
Commenting on the provision related to cap on salary, Bhattarai said salary and benefits in competitive market should be determined by person´s ability and responsibility and not by any act.
Economic experts, including Rawal, said no other terminology should replace ´economic liberalization´ in BAFIA.
Citing examples of communist country like China, Rawal said that economic modality of even the countries China is based on liberalization.
Sudarshan Raj Pandey, vice-president of ICAN, said putting limit on CEOs salary could hamper economic growth.
The sub-committee is submitting its final recommendations to the main committee within 10 days.
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