A number of senior officials from both the Ministry of Finance and Nepal Rastra Bank (NRB) - the central monetary authority -- who spoke to myrepublica.com said that there is almost unanimity among policy makers of both the institutions over the urgency of an effective mechanism to regulate what they tagged as ´nasty misuse of autonomy of public companies.´ [break]
“We have moved ahead toward formulating a regulation and there is no question of backtrack,” stressed an NRB official, but quickly added that the central bank will have ample discussions with all concerned stakeholders before coming up with the regulation.
However, bankers on the other hand seem flexing their muscles to jointly combat attempts of the central bank to curb the salary and other benefits that the chief executives of financial institutions have been enjoying.
"Not only the whole attempts seem irrational and meaningless, recent comments made by government officials clearly hint that they are jealous over the packages we are taking without assessing how professionally and competently we are running our institutions," said the CEO of a commercial bank on condition of anonymity.
With the healthy profits and continued business expansion even during the sluggish economic situation, we have justified that we deserve the perks and benefits that we are getting, he added.
Central bank officials, who are handling the case, said they do not intend to put a cap on the standard salaries of executives, but added that they are bothered with the opaque benefits that the executives are enjoying.
We agree that the salaries and some benefits to executives are transparent as they are shown in the annual reports of financial institutions, but we have traced a lot of hidden benefits and allowances awarded to them, the NRB official added.
A number of CEOs get a hefty house rent allowance even though they have their own house in the city along with a set of helpers like gardeners, cook and servants, said the official. Some of the executives have even been found using two to three vehicles from their offices along with separate drivers for each vehicle.
"Isn´t this the horrible misuse of public companies in the name of working efficiently and making healthy profits?” the official questioned. He further added that a financial institution was found sharing up to 85 percent of the total staff expenses among two to three top level executives, leaving 15 percent to be shared to the remaining staffs.
Is this type of distribution of staff expenses socially justifiable? he wondered.
In addition, most of the lower staffs in financial institutions are poorly paid, less than the government pay scale, that too by keeping them into internship for much longer period than initially agreed.
The official, who is a member of a team that recently floated the first draft comprising a number of possible models aimed at regulating remunerations and benefits for the top executives, said that some of the executives who are playing a dual role of being a promoter and executive of the same bank has been a problem.
Along with dividends, a promoter, who also works as the chief executive, manages to secure a huge amount of perks and benefits and that has been the biggest bone of contention between the management and the board of directors, the official said.
“We are exploring options to discourage the ongoing practice of allowing promoters to play a role of chief executive of the same bank,” he added.
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