The Supreme Court of Nepal has ruled that directors and chief executive officers (CEOs) of banks and financial institutions who received warnings from the central bank are ineligible for their positions. According to Ratopati, the verdict states that individuals penalized under the Bank and Financial Institutions Act cannot serve as directors if five years have not passed since the penalty.
The court clarified that warnings or reprimands issued by the Nepal Rastra Bank constitute regulatory actions. Allowing such officials to remain contradicts good governance and harms depositors’ interests. While the court did not order immediate removal, it directed the central bank to ensure compliance and monitor the situation. The ruling affects major institutions including Nabil Bank, NIC Asia Bank, and Himalayan Bank.
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