(1) Any of the following persons shall not be eligible to be elected or nominated to the office of, or to continue to hold the office of, a director:
(a) Who is below 21 years of age;
(b) Who is of unsound mind or insane;
(c) Who is a declared insolvent;
(d) Who has been blacklisted in connection with any transaction with any bank or financial institution, and a period of at least three years has not lapsed after his or her name has been removed from that list;
(e) Who is a director of any bank or financial institution or any financial institution carrying on the transactions relating to any kind of deposits or an employee serving in such institution or a serving auditor or advisor of any other bank or financial institution;
(f) Who is a partner in any kind of contract agreement with the concerned bank or financial institution;
(g) Who has acquired membership of the Stock Exchange to act as a securities dealer;
(h) Who has not subscribed the minimum number of shares required to be subscribed to be eligible for appointment as a director pursuant to the articles of association of the bank or financial institution;
(i) Who is a serving employee of the Government of Nepal, Rastra Bank or bank or financial institution; Provided that this provision shall not be applicable to the
nomination of any person made by the Government of Nepal as a director of any bank or financial institution of which shares have been purchased by it, or to the
nomination of any person made by any bank or financial institution as a director of any other bank or financial
institution of which shares have been purchased by it;
(j) In the case of a person who has been relieved of or retired from the service of the Rastra Bank after serving in the post of Governor, Deputy-Governor or Special Class employee, at least one year from the date of such relief or retirement from the service has not elapsed;
(k) Who, having a liability to pay tax pursuant to the laws in force, has failed to pay the same;
(l) Who is convicted by a court of an offense involving moral turpitude and sentenced in respect thereof, and a period of five years has not elapsed from the expiry of the sentence;
(n) Who is convicted by a court of an offense of corruption or cheating;
(o) A period of five years has not lapsed after the date on which the Rastra Bank has taken action against him or her for failure to observe a direction of the Rastra Bank or the date of suspension or dissolution after taking management by the Rastra Bank under its control.
(2) No person shall continue to hold the office of a director in any of the following circumstances:
(a) If he or she suffers from any disqualification for appointment to the post of director as mentioned in sub- section (1);
(b) If the general meeting passes a resolution to remove him or her from the office of director;
(c) If the resignation tendered by the director is accepted;
(d) If he or she is held by a court to have done any act involving dishonesty or ulterior motive in the activities of the bank or financial institution;
(e) If he or she does any act prohibited by this Act from being done by a director.