Kathmandu. With the vacancy of two deputy governors of Nepal Rastra Bank (NRB), the competition for a new leadership has started in the central bank. The posts of deputy governors fell vacant after the expiry of the five-year term of Bam Bahadur Mishra and Neelam Dhungana.
The then Prime Minister KP Sharma Oli had appointed Mishra and Dhungana as deputy governors on March 8, 2020 on the recommendation of the then governor Maha Prasad Adhikari. According to the Nepal Rastra Bank Act, 2058 BS, the term of the deputy governor is five years. According to the same provision, they have completed their term and departed.
After the vacancy of two important posts, the issue of who will be the new deputy governor is a matter of concern not only within the central bank but also in the financial and financial sectors. However, there is little chance of immediate appointment. Sources say that the appointment process is likely to move forward only after the formation of a new government as there is an interim political situation in the country after the election.
According to the NRB Act, the Council of Ministers has the power to appoint deputy governors, but for this, the recommendation of the governor is mandatory. As per the Act, the governor shall recommend the names of eligible persons from among the executive directors working in the NRB. Normally, a list of three people is sent to the Council of Ministers, although in practice a list of three people is usually recommended for double the number of vacant posts.
The names recommended by the governor reach the cabinet through the finance ministry and two people are appointed deputy governors from that list. While the final decision will be made at the political level, the initial selection will depend on the governor’s assessment.
Currently, there are 18 executive directors in the central bank. Since this group will elect the next deputy governor, they are all seen as potential contenders. Executive Directors Naresh Shakya, Rewati Prasad Nepal, Ramu Poudel, Bishrut Thapa, Dayaram Sharma, Guru Prasad Poudel, Kiran Pandit, Dr. Satyendra Timilsina, Chet Prasad Upreti, Roshan Kumar Sigdel, Dr. Ramsharan Kharel, Dr. Dilliram Pokharel, Dirgha Bahadur Rawal, Nischal Adhikari, Anuj Dahal, Deepak Raj Lamichhane, Rajan Bikram Thapa and Rajendra Bhattarai are the natural contenders for the post.
The role of the deputy governor is very important in the structure of the central bank. They are directly involved in the formulation of monetary policy, regulation and supervision of banks and financial institutions, financial stability and macroeconomic management.
Similarly, in the absence of the Governor, the Deputy Governor should also take over the responsibility of the Acting Governor. They are also responsible for running various departments of the Rastra Bank. Except for the governor’s office, the Financial Information Unit, the Department of Internal Audit and the Law Division, most of the departments are overseen by deputy governors.
Legally, the deputy governor should be a Nepali citizen and a person of high moral character. In addition, a candidate should have a Master’s degree in Economics, Finance, Banking, Finance, Commerce, Public Administration, Statistics, Mathematics or Law.
However, in practice, appointments to high positions in the NRB have been criticized not only for qualifications but also for political proximity. In the past, there have been instances where political equations have been decisive in the appointment of governors and deputy governors.
The appointments of Mishra and Dhungana were also widely discussed on the basis of their closeness to the then political leadership. As the new government is being formed again, the question of what criteria will be adopted in the selection of deputy governors has become an important question for the economic sector.
The government will be formed under the leadership of Rastriya Swatantra Party after the recently concluded elections to the House of Representatives. There is a growing concern about how the new government will approach the appointment of a sensitive institution like the central bank.
In its election manifesto, the RSP has pledged to end the party division in the constitutional and strategic bodies of the state and implement ‘meritocracy’. It has been mentioned in the manifesto that while making appointments to the premier institutions of the state, hundred percent merit and competence will be made on the basis.
If this commitment mentioned in the manifesto is implemented in practice, then the next deputy governor of the Rastra Bank is also expected to rise above the political equation and be selected on the basis of professional capacity, experience and efficiency.
According to economic and banking sector experts, it is even more necessary to have qualified and experienced people in the leadership of the central bank in the context of the current sluggish economy and various challenges in the banking system. Therefore, the appointment of the next deputy governor is seen as an important step in the stability of the financial system, not just an administrative decision.
