Section 22: Grounds for Removal of the Directors from Office

1) The Government of Nepal, through the Council of Ministers, shall remove the Governor, Deputy Governor, and Director on the conditions stipulated under sub-section (5).

Provided that the Government of Nepal shall not deprive the concerned person of a reasonable opportunity to defend himself/herself prior to remove him/her from his/her office.

2) Government of Nepal shall remove the Governor from his office pursuant to sub-section (1), on the recommendation of an inquiry committee constituted under Section 23.

3) When removing a Director or Deputy Governor under subsection (1), the Government of Nepal shall conduct an inquiry by a committee and remove them from office based on the committee’s recommendation.

4) Once the Government of Nepal initiates the process for removing the Governor, Deputy Governor and Director pursuant to sub-section (1), they shall be deemed to have been ipso facto suspended from the office.

5) The Governor, Deputy Governor and Director shall be removed from office on any of the following grounds:-

(a) If one is disqualified to become a Director pursuant to Section 21, or

(b) The lack of capability to implement or cause to implement the functions which the Bank has to carry out in order to achieve the objectives of the Bank under this Act, or

(c) If one has committed any act causing loss and damage to the banking and financial system of the country, or

(d) If one is found to have acted dishonestly or with mala fide intention in any transaction related to the business of the Bank, or

(e) If a professional license is revoked or prohibited from carrying out any profession, rendering the individual disqualified to be engaged in any trade or profession on the ground of gross misconduct, or

(f) If one is absent for more than three consecutive meetings of the Board without a genuine reason,

6) Except on the grounds referred to in sub-section (5), no Governor, Deputy Governor, or Director shall be removed from office.