KATHMANDU: Deputy Prime Minister and Minister for Finance Bishnu Paudel is dissatisfied with Prime Minister KP Sharma Oli over the appointment of the new governor of Nepal Rastra Bank (NRB).
Senior officials at the finance ministry say Minister Paudel is unhappy as his preferred choice for the position has been overlooked.
Earlier in March, the government had formed a recommendation committee under Minister Paudel to recommend three names for the Governor. However, one of the members, former NRB Governor Dr Bijay Nath Bhattarai, resigned even before the committee could hold its first meeting. This has stalled the governor selection process.
Economist Dr Bishwo Paudel is the other member of the committee.
Paudel has been complaining that the committee was rendered ineffective due to Prime Minister Oli’s interference. Leaders close to Paudel claim that Prime Minister Oli has been interfering in the Finance Minister’s work through his Economic Advisor, Dr Yuba Raj Khatiwada.
Minister Paudel has said that the appointment process will move forward with the appointment of a new member to the recommendation committee.
However, he did not say when the new member will be appointed.
According to leaders close to Paudel, Prime Minister Oli has been exerting pressure on appointments and policy decisions related to the finance ministry. “This is why Minister Paudel has not been able to fully exercise his role,” one of them told Himal Press.
After the tenure of former governor Maha Prasad Adhikari ended on April 5, Prime Minister Oli had proposed appointing Deputy Governor Dr Neelam Dhungana as the new Governor. However, Sher Bahadur Deuba of the coalition partner, Nepali Congress (NC), pushed for the appointment of Dr Gunakar Bhatta, Executive Director at Nepal Rastra Bank. Oli eventually agreed to appoint Dr Bhatta. However, the appointment has been pending as the recommendation committee has not been able to hold its meeting.
Leaders close to Minister Paudel say he is unhappy with Bhatta’s impending appointment as the central bank governor. They claim that Paudel has faced consistent pressure from Oli’s Economic Advisor, Dr Khatiwada. According to a senior finance ministry official, Minister Paudel is not allowed to make unilateral decisions without consulting the prime minister and his advisor.
Minister Paudel had lobbied to make Acting Governor Dr Dhungana the permanent governor and had discussed the matter with Prime Minister Oli. Since Oli agreed on NC’s governor pick, Bhatta, without consulting Paudel, the finance minister is naturally dissatisfied.
After becoming certain of his appointment as the next governor, Bhattara has stepped down from his position as the executive director of the NRB. His resignation, however, has not been accepted.
A UML leader close to Paudel said Oli has repeatedly sidelined the finance minister in important appointments, including the appointment of chairs at the National Insurance Authority (NIA) and the Securities Board of Nepal (Sebon), where Khatiwada played an instrumental role.
Dr Khatiwada, however, told Himal Press that he has not interfered in the work of the finance minister or the finance ministry. “There are always rumours,” he said. “I have never obstructed the minister’s work.”
Senior officials at the finance ministry also complain that Oli and his advisors are interfering in the budget preparation process.
Minister Paudel, however, maintains that he is continuously working. “On some matters, we must consult with the government leadership to make decisions,” he said. “This should not be labelled as pressure. Since the government is based on political consensus, some decisions, including appointments, must follow political agreement. It cannot be termed interference.”
Senior central bank officials claim that Dhungana has been refusing to approve the resignation of Bhatta on the advice of Minister Paudel.
Bhatta had tendered his resignation to make him available for selection for the position of governor, as the NRB Act bars the recommendation of executive directors for governorship.
Economists have expressed concern that political interests are now affecting the economic sector. Economist Keshav Acharya said that a lack of political consensus has delayed the appointment of a new governor. “The government has ignored the provisions of the Act, and political interests are clearly at play,” he said. “This is having an impact on the economy.”
