Nepal Rastra Bank (NRB) has barred banks and financial institutions (BFIs) from hiring foreign nationals in an arbitrary manner.

BFIs that are over 50 percent foreign owned should not have more than seven foreign employees, the central monetary authority said in a directive. BFIs with 20 to 50 percent foreign ownership can have up to five foreign staff. BFIs without foreign investment are not allowed to employ foreign nationals.

However, the central bank has permitted banks to appoint foreign nationals in selected positions if qualified human resources are not available locally. This provision is similar to the condition included in the Labour Act.

Also, BFIs that have attracted government investment can hire foreign nationals if there is need to introduce highly technical reform measures, says the directive.

“We came up with this directive as issues related to hiring foreign nationals in the banking sector aren’t clear,” said NRB Spokesperson Narayan Prasad Paudel. This ambiguity, however, has not led to haphazard hiring of foreign nationals, Paudel added.

Some banks that have foreign capital are Standard Chartered Bank Nepal, Nabil Bank, Himalayan Bank, Nepal SBI Bank, Everest Bank, NMB Bank and Nepal Bangladesh Bank. 

BFIs that desire to hire foreign nationals must sign a technical service agreement with them, says the NRB directive. The contract can be for a period of five years, but it needs to be renewed every two years. In case the foreign national is highly skilled, the contract can be renewed for a maximum period of seven years, says the directive.

The central bank has also said that BFIs that hire foreign staff must work to build the capacity of domestic employees and continue to substitute foreign nationals with Nepali employees. Likewise, BFIs are permitted to recruit foreign nationals for specified technical positions only.

Published on: 15 February 2017