KATHMANDU: The process of appointing a new governor of Nepal Rastra Bank (NRB) has turned into a political power-sharing deal, raising questions about the independence of the institution.
Recent developments show that the governor’s appointment is driven by political bargaining rather than a technical selection.
The failure of Nepali Congress (NC) President Sher Bahadur Deuba to secure consensus for Executive Director Dr. Gunakar Bhatta as governor, Acting Governor Dr Nilam Dhungana’s obstruction in Dr Bhatta’s appointment and Deuba’s subsequent decision to pick economist Dr Bishwa Poudel have clearly demonstrated political interference in the autonomous regulatory institution.
The appointment process is likely to be delayed further as Dr Poudel is a member of the three-member committee formed to recommend the next governor. He must resign from the committee to make himself available for selection. The cabinet will then have to add another member to the committee. Only then can the committee convene and recommend three names for the position. The cabinet will then appoint one of the three names as the governor.
The central bank has been without a leader since Mahaprasad Adhikari completed his term as the governor on April 5. According to the Nepal Rastra Bank Act, 2002, a new governor must be appointed and publicly announced one month before the incumbent’s term ends. The delay, uncertainty, and lack of clarity in the governor appointment process have raised questions about the government’s efficiency.
Dr Poudel, who has reportedly been picked for the position by the NC, is actively involved in politics. He contested the 2022 general election as a Nepali Congress candidate in the Chitwan-1 seat of the House of Representatives. He previously served as a member and vice-chairperson of the National Planning Commission (NPC). Deuba reportedly picked him for the position after the Acting Governor blocked efforts to appoint Dr Bhatta as the next governor.
A senior NC leader told Himal Press that Dr Poudel has agreed to become governor following Deuba’s proposal. “Dr Poudel wants to remain active in party politics. He has been working in his constituency, preparing for the next election,” the leader said. “He has already accepted Deuba’s proposal.”
NC sources say Deuba had previously proposed Dr Poudel for the governor’s post. However, Poudel reportedly told Deuba he had no interest in the role and that he was preparing to contest elections again.
Poudel told Himal Press that while he has received an informal proposal to become governor, no decision has been made. “I have received an informal proposal to become governor. However, I haven’t decided whether to accept it,” he said. “I feel happy engaging with the people in my constituency.”
Economic expert Keshav Acharya accused the government of committing a serious error by not appointing a governor on time. “With the central bank without leadership, the country’s economy is being pushed into further uncertainty. The government has not shown concern for this issue. The government’s negligence and delays could create a serious policy crisis,” Acharya said.
