23rd July 2025, Kathmandu
In a landmark move that sets a new precedent for corporate compliance and employee welfare within Nepal’s dynamic financial sector, Siddhartha Bank Limited has officially formalized an agreement with the Citizen Investment Trust (CIT) to take over the comprehensive management of its gratuity and retirement funds. This strategic decision by Siddhartha Bank is a direct and proactive response to the Government of Nepal’s revised fiscal policy for the year 2082/83 BS (2025/26 AD), which now explicitly mandates that such critical employee benefit funds must be managed by duly authorized and certified institutions. This significant transfer underscores the evolving regulatory landscape in Nepal and highlights Siddhartha Bank’s commitment to adhering to the highest standards of financial governance.
Siddhartha Bank and CIT
The formal agreement was meticulously signed by Parbat Kumar Karki, Executive Director of the Citizen Investment Trust, and Sundar Prasad Kandel, Chief Executive Officer of Siddhartha Bank. Under the terms of this pivotal agreement, all gratuity and retirement funds belonging to Siddhartha Bank employees – encompassing both contribution-based and non-contribution-based schemes that were previously managed internally by the bank – will now fall under the professional and transparent administration of the CIT.
This monumental change will directly impact the retirement and gratuity fund management for nearly 2,000 employees currently serving at Siddhartha Bank. By undertaking this strategic shift, Siddhartha Bank has positioned itself as one of the early and leading adopters of the new policy. This directive, prominently introduced under Section 23 of the Finance Act 2082 BS, signifies a significant national regulatory reform aimed at standardizing and professionalizing the management of employee long-term benefits across various institutions in Nepal.
Historically, the oversight and management of such vital retirement and gratuity funds primarily rested under the purview of the Inland Revenue Department (IRD). However, the recently amended Finance Act 2082 has introduced a transformative requirement: these funds must now be affiliated with and managed by explicitly authorized entities like the Citizen Investment Trust. Further emphasizing the urgency and importance of this compliance, the IRD had issued a public notice on Ashad 31 (July 15, 2025), serving as a crucial reminder to all institutions to comply with this revised regulation by the stipulated deadline of the end of Ashad 2083 BS (mid-July 2026). Siddhartha Bank’s prompt action in transferring all relevant funds to the CIT well within this timeframe showcases its commitment to legal compliance and proactive governance.
Enhancing Transparency, Professionalism, and Long-Term Employee Welfare
The decision by Siddhartha Bank to transfer its gratuity and retirement funds to Citizen Investment Trust is poised to deliver multifaceted benefits, significantly enhancing the long-term financial security for its dedicated employees. By moving these funds to a specialized, government-authorized institution like CIT, the bank ensures that all existing retirement and gratuity accounts held by its employees are now managed within a centralized, highly transparent, and professionally governed framework.
This strategic partnership is expected to:
- Improve Fund Transparency: CIT’s established processes and regulatory oversight will provide greater clarity and accountability in the management of these crucial employee funds.
- Ensure Sustainable Management: As a dedicated fund management entity, CIT possesses the expertise and infrastructure to ensure the prudent investment and sustainable growth of retirement benefits, safeguarding employees’ future.
- Enhance Employee Confidence: Employees gain greater assurance regarding the security and proper administration of their future financial benefits, fostering trust and morale within the organization.
- Demonstrate Institutional Accountability: By aligning with national regulatory reforms, Siddhartha Bank reinforces its commitment to corporate accountability and good governance practices.
“The transition of our gratuity and retirement funds to Citizen Investment Trust reflects our unwavering dedication to regulatory compliance and, more importantly, to the welfare of our employees,” stated Sundar Prasad Kandel, CEO of Siddhartha Bank. “We firmly believe this strategic move will bring greater assurance to our valued staff regarding their future financial security and underscore our responsible corporate citizenship.”
Echoing this sentiment, Parbat Kumar Karki, Executive Director of CIT, warmly welcomed the new partnership. “We are extremely pleased to undertake the management of Siddhartha Bank’s significant retirement and gratuity funds,” Karki remarked. “This collaboration not only expands CIT’s crucial responsibilities within Nepal’s financial landscape but also vividly highlights our growing role in ensuring efficient, secure, and transparent retirement fund management across the nation.”
Setting a Precedent for Nepal’s Financial Sector
This proactive and compliant step by Siddhartha Bank is anticipated to set a powerful precedent for other banks and financial institutions across Nepal. Many of these institutions are now expected to follow suit in the coming months, initiating their own transfers of internally managed gratuity and retirement funds to authorized entities like CIT to comply with the government’s new directive.
With an increasing national focus on financial transparency, robust regulatory frameworks, and the protection of employee rights, such collaborations between financial institutions and specialized trusts are viewed as a vital and necessary step towards constructing a more structured, reliable, and secure retirement system throughout Nepal. This move signifies a maturation of the financial sector, moving towards greater institutionalization and safeguarding of long-term employee benefits.
In summary, Siddhartha Bank’s decisive action to transfer its employee gratuity and retirement funds to the Citizen Investment Trust represents a significant and positive development in Nepal’s financial sector. This strategic alignment not only strengthens adherence to evolving regulatory mandates but also robustly ensures the long-term well-being and financial security of a substantial workforce, setting a benchmark for responsible corporate governance and employee care in the country.
Read More: Siddhartha Bank and CIT