KATHMANDU: The Supreme Court has ruled that shareholders holding both promoter and public shares in banks and financial institutions (BFIs) cannot contest board elections under the public category.

A division bench of Justices Kumar Regmi and Bal Krishna Dhakal dismissed a writ petition filed by Citizens Bank International shareholder Ratneshwar Prasad Sharma, upholding the central bank’s regulatory authority.

Sharma had moved the apex court after the bank’s election committee disqualified his candidacy for a public director seat because he also owned promoter shares.

The legal dispute had stalled the bank’s scheduled board elections last November following an initial interim stay order.

In its final verdict, the court emphasized that corporate governance is paramount since BFIs manage billions in public deposits.

The bench noted that allowing promoter-group investors to secure seats under the public quota creates a severe conflict of interest, undermines transparency, and fails to protect the interests of small-scale investors.