Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) has released the Salary, Allowances and other facilities of the Chief Executive Officers of Banks and Financial Institutions, 2083 BS.

This guideline has been issued to maintain uniformity in determining the salary, allowances and other financial facilities of the Chief Executive Officer in the banks and financial institutions, to manage risk and to promote corporate governance.

The Board of Directors of the concerned organization shall be responsible for determining the salary, allowances and other financial facilities of the CEO, subject to demand.

The Board of Directors of the organization shall form a three-member Salary, Allowances and Other Facilities Recommendation Committee under the convenorship of an independent Director of the Board of Directors of the organization to recommend the salaries, allowances and other facilities of the CEO.

There are various criteria for determining the salary of the CEO. The committee will have to take the salary, allowances and other facilities formed by the Board of Directors of the bank and financial institution as the primary basis and submit the recommendation related to the salary, allowances and other facilities of the CEO to the Board of Directors.

The qualifications and experience of the CEO, the rate of return on capital of the licensed institution, the size of the business (loan, investment and deposit mobilization), the status of operating profit, the basis for future business growth and the risks inherent in the organization should be considered.

Similarly, the rate of return on capital of the organization similar to the organization, the size of the business, the salary, allowances and facilities provided to the CEO by the organizations with operating profits, the difference in remuneration between the licensed organization itself (junior assistant) and the CEO should be reviewed. The Board of Directors of the Association shall take the final decision in this regard on the basis of the recommendation submitted by the Committee.

The CEO should be clearly mentioned in the agreement regarding the annual salary, allowances and other facilities to be received by him/her. Such facilities should be classified under three headings.

The Board of Directors of the concerned organization shall make an arrangement not to provide any other kind of amount and facilities to the CEO during the term except as mentioned in the agreement.

The organization will provide one mobile and laptop facility each to the CEO as determined by the salary, allowances and other facilities as determined by the recommendation committee. Salary, allowances and other facilities shall be one vehicle as determined by the recommendation committee.

This provision shall not be an obstacle to continue the vehicles currently in use pursuant to the existing agreement. Similarly, another vehicle will not be provided to the same CEO during his service period (even if he is re-appointed).