The interim order paves way for Manandhar to continue as Prime Commercial Bank's CEO
KATHMANDU, Aug 14: The Supreme Court has stayed a new rule issued by the Nepal Rastra Bank (NRB) on setting the age bar for the chief executive officer (CEOs) of bank and financial institutions (BFIs).
Issuing an interim order on Tuesday in response to a writ filed by the CEO of Prime Commercial Bank Ltd, Narayan Das Manandhar, a single-member bench of the Supreme Court headed by the Chief Justice Cholendra Shumsher JBR ordered the NRB not to implement its recent circular to the BFIs on capping the age for the CEOs immediately and put it in the status quo.
Not only the court's interim order has blocked the rule for the implementation of the age bar for now, it has also paved way for Manandhar to continue as the CEO in Prime Commercial Bank Ltd.
Through its circular to BFIs on August 5, the NRB has set age bar of 69 years for CEOs of BFIs. The circular has also restricted CEOs from continuing in the BFIs as CEO after the age of 69. The new age bar had made Manandhar ineligible to become the CEO of Prime Commercial Bank Ltd.
Making the NRB the defendant, Manandhar moved to the apex court on August 7 demanding the annulment of the NRB's rule.
The apex court struck down the rule citing a fundamental right in the constitution that ensures rights to employment for every citizen of the country.
“Against a provision in the constitution that only the legislative law can restrict the constitutional right to employment for citizens, it is seen that the defendant's circular has infringed the constitutional right of the petitioner to exercise the fundamental right,” read the interim order of the court.
Stating that the NRB Act 2002 that the central bank has cited in the circular does not provide it the authority to fix the age bar for CEOs of BFIs, the apex court did not see the legal merit on the age bar fixed in the circular.
While the Bank and Financial Institution Act, 2017 has fixed the minimum age to become the CEO, no legislation has either fixed the age limit or made any restriction, read the text of the interim order.
However, a senior NRB official told Republica that they will continue to defend the new rule on the age bar.
“We must respect and accept the court order. However, this is only an interim order. We will defend our rule in the next hearings to vacate the interim order,” said Laxmi Prapanna Niroula, an executive director at the NRB.
The court has provided 15 days for the NRB to reply in writing why the court should not issue the order as demanded by the petitioner or any legal reasons why not to issue the order in line with the defendant.