KATHMANDU, April 7: The government has failed to appoint a new governor of Nepal Rastra Bank (NRB), creating a void in leadership of the apex body which is liable to regulate the overall monetary affairs of the country.
Outgoing NRB Governor Maha Prasad Adhikari has officially retired from his position after completing his tenure of five years on Sunday. Adhikari, who was appointed as the Governor of the central bank on April 6, 2020 had been mandated to serve in the position till April 6, 2025.
According to government rules, the new NRB governor must be finalized one month before the incumbent government retires from the job. However, the government has failed to give a new leadership to the NRB at a time when the country’s financial system has been struggling for over a year due to economic slowdown just because the leaders are busy in political bickering and in favour of a quota system.
As per an NRB official, the government was poised to appoint a new NRB governor before Prime Minister KP Oli’s visit to Thailand to participate in the 6th Summit of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). “However, the task could not be accomplished as the ruling parties failed to reach a political consensus over the issue, leading to more dilly dallying in the appointment process,” said the source.
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Two weeks ago, the government formed a three-member committee led by Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel to recommend candidates for the position. The other members of the committee include former Governor Bijay Nath Bhattarai and former Vice-Chairman of the National Planning Commission Bishwo Paudel.
According to the NRB Act, the high-level committee recommends the government with three nominees that include experts from monetary, banking, finance, commerce, management and corporate law. One of the nominees must be an incumbent deputy governor of the NRB.
The NRB Act also talks about not considering political persons in the nominees for the NRB governor. Although the high-level committee is said to have been given autonomy to choose the right candidate, it cannot do so without consent of the leaders of the ruling political parties.
The private sector and experts have also been suggesting the government to appoint only an individual having sound knowledge of the monetary and financial affairs as the fresh NRB governor. But excess political lobbying for the appointment has created suspicion that the government might not appoint the right person as the chief of the apex monetary institution of the country. At present, Gunakhar Bhatt, Neelam Dhungana and Prakash Kumar Shrestha, who hold experience in higher positions at the NRB, have been reported to be in the race for the coveted post. Besides, the former CEO of Nabil Bank Gyanendra Dhungana, NRB Board Member Ravindra Pandey and former chief secretary Rajendra Kishor Chhetri are also considered as potential candidates for the NRB chief.
The recent move of the government has also fuelled the possibility that the government is looking forward to appointing the NRB chief from political alliance. Last week, the Ministry of Finance amended the “Standards for Appointment and Nomination of Officials and Members in Finance-Related Public Entities 2016,” which has abolished the age restrictions on appointments in public institutions.
Speaking at a program on Sunday, Nepali Congress Leader Shekhar Koirala said manipulations of middlemen have been observed in the process of appointment of NRB governor. “It will be unfortunate if the government selects the governor under the influence of middlemen and a mockery of the government’s commitment to good governance,” said Koirala.
The practice of delayed appointment in the central bank governor however is not new, shows the records with the NRB. While the tenure of previous Governor Chiranjibi Nepal was completed on March 18, 2020, outgoing Governor Adhikari was appointed only on April 6 of the same year; almost 18 days after the position remained vacant. Likewise, Yuba Raj Khatiwada assumed the position only on March 22, 2010, almost eight months after the retirement of his predecessor Deependra Bahadur Kshetry on July 26, 2009.