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PSC bars central bank from amending retirement policy

- Post Report, Kathmandu
The Public Service Commission (PSC) is the apex body that hires staff for government and state agencies

Nov 13, 2017-The Public Service Commission (PSC) has poured cold water on the plan of the central bank to immediately scrap a provision that makes it mandatory for employees to retire after completing 30 years of service.

The apex body that hires staff for government and state agencies on Sunday told the Nepal Rastra Bank (NRB) to shelve the plan to amend the compulsory retirement provision for now, as the government is “in the process of introducing a new Federal Civil Service Act”.

The government was supposed to enforce the Act before the dissolution of Parliament on October 14. But that couldn’t happen. “There are talks about introducing an ordinance on federal civil service, but the government is currently busy with the upcoming elections. So, the NRB may have to wait until a new government is formed after the elections,” said PSC Spokesperson Laxmi Bilas Koirala.

Earlier, the NRB had sought permission of the PSC to remove a provision in the Employees Guideline that obligates employees to retire after completing 30 years of service. 

At present, NRB staff must retire after completing 30 years of service or after reaching the age of 58, whichever comes first. 

Had that provision been removed as per the request of the NRB, central bank employees would have been allowed work even after they completed 30 years of service. This would have allowed people, who joined the NRB at the age of, say, 20, to serve the institution till 58, taking up the number of years in service to 38, as against the current provision of 30. The NRB did not want to comment on the latest development, stating “it is yet to receive the letter from the PSC”.

Earlier, the NRB’s decision to amend the retirement policy had triggered protests 

at the central bank, as many employees said the management was trying to serve vested interest of some of the staff.

The NRB currently has a workforce of around 1,200 people. Of these people, 385 are retiring in the next three years. Majority of these employees are retiring because they have completed 30 years of service. And many employees retiring on the basis of number of years of service do not have proper educational qualification or have educational qualifications other than those stipulated by the NRB, central bank officials said.

“These people are pushing for removal of the provision on compulsory retirement after 30 years of service, so that they could serve the organisation for a longer period,” NRB officials had previously said.

The NRB management’s plan to amend the retirement policy, according to many at NRB, will allow “older and especially unproductive staff” to continue working for the central bank, thereby reducing intake of “younger, smarter and techno-savvy” people. 

The change in policy, many at NRB fear, will also bar competent young employees 

from climbing the rungs of career ladder at a desired pace, as most of the senior posts would be occupied by older employees.

Worse, the change in policy will encourage state-owned and state-run financial 

institutions like Rastriya Banijya Bank, Nepal Bank Limited and Agricultural Development Bank, which are already overstaffed, to follow suit. This is because the three institutions follow in the NRB’s footsteps to frame policies for employees.

The PSC has said that it does not want the NRB to make any change to its retirement policy at the moment, as it is trying to create uniformity in retirement age for everyone who is in the payroll of the government and the state. 

Currently, retirement age for those engaged in teaching profession is 63, whereas retirement age for those working in the health sector and parliamentary service is 60. The retirement age for civil servants, on the other hand, is 58.

“All these people are getting their salaries from the same state coffer, yet they retire 

at different ages. So there has to be some uniformity,” Koirala said.

Published: 13-11-2017 09:00

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