Section 64: Ineligibility for Appointment as Auditor

1) Any of the following persons or any firm, company or institution in which such person is a promoter or partner shall not be eligible to be appointed as an auditor of a bank or financial institution: –

(a) A promoter, Director, Chief Executive of a bank or financial institution or his\her family member,

(b) An official, employee or internal auditor of the bank or financial institution,

(c) A person working as a partner of any promoter, Director or employee of the bank or financial institution,

(d) A borrower of the bank or financial institution, a person with significant ownership or a relevant person or person having financial interests,

(e) A person who has been declared bankrupt in Nepal or abroad,

(f) A person, firm, company or institution having subscribed one percent or more shares of the bank or financial institution,

(g) A person who has been punished in any criminal offence by the court and a period of five years has not lapsed after he or she has served the punishment,

(h) A person who is disqualified to become an auditor according to prevailing laws.

2) If any person appointed as auditor of a bank or financial institution is found to be ineligible pursuant to sub-section (1), his/her appointment shall be deemed to have been ipso facto invalid.