The code of conduct proposed by the Audit Committee, headed by NRB board member Dr Parthebeshore Timilsina, disallows the central bank´s employees from investing in all sorts of financial institutions that have acquired their operation license from the central bank.
The code bars not only the employees of the NRB, but also their closest relatives, from buying stocks from the secondary market and from investing in financial institutions, said an NRB official who was involved closely in formulating the code of conduct.
The latest measure taken by the central bank came about as a response to the growing allegations that the employees of the bank have heavily invested, and in most of the cases, been able to secure handsome profits--on account of their having access to vital information of the listed financial institutions.
The code of conduct does allow NRB employees and their closest relatives to make investments in businesses other than financial institutions; but they can only do so after getting due approval from the concerned department in the central bank.
Similarly, the code of conduct also allows employees to take out loans from financial institutions, but they will have to disclose such loans to the concerned authority in the central bank within 15 days of acquiring such loans. For that purpose, the bank has prepared a format which, among others, seeks details about the purpose for such borrowings and mode of repayments.
The newly endorsed code of conduct also restricts the employees from providing fee-based consultancy services to other institutions. They are, however, allowed to engage in such activities if they have taken prior approval from the central bank. "When seeking permission, the interested employee will have to prove that there will be no conflict of interests while performing specific consultancy services," said the official.
He further added that since the code of conduct will be made a part of the bylaw that governs the terms and condition of the NRB employees, it will have all the details on the action that will be taken if employees violate the code of conduct.
Related story
Revised interest rate corridor system introduced
