The mysterious absence of 10 out of the 12 executive directors of Nepal Rastra Bank at the swearing-in ceremony for two newly-appointed deputy governors of the central bank has come out in the open at a time of mistrust between top management and the bank executives. It is not very unusual, though, to hear about voices and sometimes even acts of resentment whenever political appointments are announced at lucrative entities like the central bank. But the well-coordinated boycott of the ceremony staged by the executive directors, who were undoubtedly vying for the second top positions in the central bank of Nepal, is something alarming.
Many have interpreted their action as unwarranted while some have even remarked that it is an indication there will be a lack of wholehearted cooperation from the executive directors to the top management in the days to come. If that is true and if that translates into action at the central monetary authority, it will be self-destructive and such a short-sighted attitude will hurt the executive directors themselves more than the central bank as long as they maintain their association with that institution. It is in their personal as well as institutional interest that the dissident executive directors cooperate with top-level management or quit in protest. Remember the incident when Rajan Singh Bhandari resigned from his post of executive director when the government appointed Bir Bikram Rayamajhi, who was junior to him in years of service, as deputy governor in 2005.
It is also the utmost duty of top management to create a conducive environment for that sort of thing to happen. What should be noted is that the protest this time is slightly different from what NRB was used to in the past, when such protest would invariably be at an individual level. As all the disenchanted executive directors have expressed their resentment jointly, the problem is apparently not something to be brushed aside.
These newly surfaced cracks are not good signs for the central bank, especially in view of the challenges it is facing over managing inflation, balance of payments, money supply and correcting the course of the financial sector as a whole.
Hence, we urge NRB top brass to reorient their management approach. It must increase interaction, hear grievances and address concerns, creating space wherein every diverse idea can be accommodated and the central bank can perform professionally. At the same time, we also ask the disgruntled executive directors to let professionalism prevail. The central bank must stand tall and united on occasions like this and safely steer the financial sector re-engineering. This calls for further enhancing the capacity of NRB and there is no room for complacency, let alone division and non-cooperation.