The Banks and Financial Institution (BAFI) Bill, 2063 (2006) was endorsed on Tuesday with a majority. Experts believe the bill will establish greater financial stability and corporate discipline in banking industry. 

A meeting of the Legislature-Parliament endorsed the bill after Finance Minister Krishna Bahadur Mahara tabled the amendment proposal for endorsement.

Responding to questions raised by lawmakers during the meeting, Minister Mahara said the amended bill aims to remove anomalies seen in the banking sector, increase people’s faith in banks, and promote the banking industry to international standards.

“The country’s economy will improve with the passage of the bill. It will contribute in controlling the risks seen in banking transaction. It will be a breakthrough in banking sector,” said Minister Mahara. The bill will automatically come into effect once the President authenticates it.

The bill bars those occupying any constitutional post from becoming board members of banks and financial institutions (BFIs) at the same time. According to the bill, the term of a chief executive officer of a BFI would be four years, which could be extended by another four-year term. It has limited the total tenure of the CEO in a BFI to just two terms.