The reform process in two state-owned banks—Rastriya Banijya Bank (RBB) and Agriculture Development Bank Limited (ADBL)—is taking a back seat, thanks to increasing trade unionism and political interference.
Daily operations of these banks have been affected for the last few weeks due to strikes called by the trade union affiliated to the Nepali Congress (NC).
The obstruction by the union saw ADBL Chief Executive Officer (CEO) Shayam Singh Pandey resigning from his post. In RBB, newly appointed CEO Shiva Devi Kafle has been barred from entering her office by the staff.
Even after Pandey’s resignation, ADBL trade union has not stopped their agitation which was mainly against recent recruitments in the bank. Employees have padlocked the offices of deputy general manager, directors assigned to nine regional offices and the administration department.
“A total of 1019 employees staged a sit-in on Monday,” said Mukti Nath Pant, president of NC-affiliated Financial Institution Employees’ Union. The union has put forth a 28-point demand. ADBL unions have been protesting against the management decision to recruit new employees instead of making temporary employees permanent. Pandey has maintained that he recruited new employees on merit basis.
Now, in the absence of a CEO, the trade union at ADBL has forwarded their demands to the board of directors. “We have already informed about our demands to the finance ministry and Nepal Rastra Bank (NRB),” said Pant. The RBB’s case is of government’s indecision. Earlier,
the parliamentary Finance and Labour Committee had objected the CEO appointment process, citing inferior selection criteria.
It had asked the Finance Ministry to come up with a new procedure, following which a committee was formed under the Energy Secretary Balananda Poudel to appoint CEO.
However, the government appointed Kafle as stop-gap CEO for the period until another CEO is appointed through a free competition. Unions at RBB objected Kafle’s appointment and have been staging sit-in before CEO’s office every day for three hours.
Kafle said her appointment was just for a stop-gap period and that RBB will soon appoint a new CEO. “We are performing our duty after sit-in concludes,” said Kafle.
On Monday, RBB published a vacancy notice for a CEO with relatively stronger criteria.
In both banks, reforms measures have been carried out with foreign aid. RBB is under the reform process as per the World Bank-sponsored Financial Sector Reform Programme, while Asian Development Bank has aided the reforms in ADBL.
Although the financial sector reform programme will end in December, RBB will still remain as a sick bank with negative net worth of billions of rupees. Due to intense politicisation, reform measures at the bank could not be carried out properly even after bringing in foreign management,” said a senior NRB official.
The central bank has also failed to appoint a CEO in Nepal Bank Limited for the last four
years even after five attempts. Currently, NRB’s own management team is running the oldest bank of the country.
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