Section 18: Disqualification of Directors

1) The following persons shall not be eligible to become a Director of the bank or financial institution:-

(a) Having not attained the age of 25 years,

(b) Having an unsound mind or insane,

(c) Having declared bankrupt in Nepal or abroad for being unable to pay debt,

(d) Having blocked or declared defaulter in connection with any transaction with any bank or financial institution in Nepal or in abroad, and a period of at least three years has not been completed after removal of his\her name from the blocklist or list of defaulter,

(e) The incumbent Director or an employee of any corporate body carrying out transactions of bank or financial institution or any institution collecting any type of deposits or carrying out transactions relating to insurance,

(f) Borrower or incumbent auditor or advisor of concerned bank or financial institution or the person, firm or company who/which is the partner in any kind of contract with the concerned bank or financial institution or having personal interests,

(g) Who has acquired membership of the Stock Exchange to act as a securities broker of merchant banker,

(h) Incumbent Director of the bank or financial institution,

(i) The person who has not subscribed to the minimum number of shares required to be subscribed to be eligible for appointment as a Director pursuant to the Articles of Association of the bank or
financial institution,

(j) Incumbent employee of the Government of Nepal, or an organisation having ownership of Government of Nepal, or Rastra Bank or of a bank or financial institution,

Provided that this provision shall not be deemed to have made obstruction to nominate a Director in micro-finance or infrastructure development bank, of which share has been purchased by the Government of Nepal or the institution having under the ownership of Government of Nepal or Rastra Bank or bank or financial institution.

(k) Who, having a liability to pay tax pursuant to the laws in force, has failed to pay the same

(l) Having not completed a period of ten years after replenishment of punishment upon being convicted of an offence of theft, cheating, forgery, fraud, corruption, any offence involving moral turpitude or a banking offence from a court of Nepal or of a foreign country,

(m)Having been taken action by a regulatory agency as per law for committing an act against the law and not having completed a period of five years after being taken such action,

(n) In case of an independent director, promoter or shareholder holding ownership of more than 0.1 % share of the concerned bank or financial institution,

(o) Having remained to clear imprisonment and dues of fine as imposed by the court or having defaulted to pay government due.

2) Notwithstanding anything contained in Part (e) of Sub-Section (1), an official or employee of a bank or financial institution may work as a Director of the subsidiary company of the same bank or financial institution.