Banking Khabar – In the one month since the process to appoint a new Governor began, five individuals have resigned from their posts, yet Nepal Rastra Bank (NRB) still remains without its 18th Governor. From the moment the position became vacant, several aspirants stepped down from their current roles in anticipation of assuming the top job.
The first to resign was Dr. Prakash Kumar Shrestha, Executive Director of NRB and a member of the National Planning Commission. Although he tendered his resignation on Falgun 18, it only came to light in the third week of Chaitra.
Next came Nabil Bank CEO Gyanendra Dhungana, who resigned effective from Chaitra 10—two weeks before the Governor’s seat officially became vacant on Chaitra 24. Following this, the seemingly confirmed candidate, Dr. Gunakar Bhatta, submitted his resignation from the post of Executive Director on Baisakh 5. However, Acting Governor Dhungana did not approve his resignation, complicating the matter.
Soon after, member of the Governor Recommendation Committee, Vijayanath Bhattarai, resigned on Baisakh 9, citing the committee’s failure to convene meetings. When Dr. Bhatta’s resignation was not accepted, the Nepali Congress, appearing frustrated, proposed Dr. Bishwo Paudel as the new Governor. Consequently, Dr. Paudel himself resigned from the Recommendation Committee on Baisakh 28.
Now, the committee stands incomplete again. The government is first required to reconstitute the committee before it can forward three names to the Cabinet for final selection. Many of the hopefuls who had long aspired to become Governor are now left disappointed, their dreams unfulfilled. Once seen as a near-certain choice, Dr. Gunakar Bhatta left for the United States after his resignation was not accepted—apparently disillusioned by the ongoing controversies and political maneuvering in the selection process.
The position of Governor has remained vacant since Chaitra 24, and Dr. Neelam Dhungana is currently serving as Acting Governor. Even after one month, the government has failed to appoint a new Governor, despite legal provisions requiring it to do so at least one month before the post becomes vacant.
According to Section 25 of the Nepal Rastra Bank Act, 2058:
“The Government of Nepal shall normally appoint a new Governor under the provisions of this Act at least one month prior to the expiration of the term of the incumbent Governor, and shall publicly disseminate the information.”
However, no such public announcement was made. Instead, behind-the-scenes lobbying and political networking took precedence in the race to the top. In just one month, aspirants lobbied senior leaders from major coalition parties, Nepali Congress and CPN-UML. Yet even a government holding a two-thirds majority has failed to finalize the appointment.
Political Interference in an Independent Institution
Though established as an autonomous body, Nepal Rastra Bank has repeatedly faced political interference—whether in the appointment of Governors or other internal operations. Globally, central banks are expected to remain free from governmental interference. Even in neighboring India, two Governors resigned in protest of government overreach.
But in Nepal, political influence over NRB is intensifying, effectively reducing the central bank to a government-controlled body. This has severely undermined its institutional credibility. The interference has weakened the bank’s institutional capacity, which is dangerous given that the financial sector is the backbone of any economy. Regulatory bodies like NRB must remain independent. However, the ongoing tug-of-war and political favoritism have clearly led the government to ignore the provisions of the NRB Act, resulting in continued delay in appointing the 18th Governor.
This leadership vacuum has caused delays in the third review of the Monetary Policy. Failure to appoint a Governor in time has begun to negatively impact Nepal’s inflation control and balance of payments. While a new Governor could take necessary steps to stabilize the economy, the prolonged delay is now affecting the entire financial sector.
Although leaders of the Nepali Congress and CPN-UML have reportedly reached consensus on the appointment, implementation has been stalled. As early as three months before former Governor Maha Prasad Adhikari’s term expired, many had already begun lobbying for the job, briefing key power centers on how they would help get the economy “back on track” if appointed.
The race included current and former Deputy Governors, incumbent and retired Executive Directors of NRB, economists, administrators, and reputed figures from other government institutions. Many of them, especially those with close ties to ruling party leaders, were involved in aggressive lobbying. However, the process has now circled back to Dr. Bishwo Paudel—himself a former member of the Recommendation Committee.
Policy Manipulation for Interest Groups
On Falgun 27, in line with the interests of certain groups, the government removed the upper age limit of 65 for appointments to public institutions under the Finance Ministry, by amending the “Standards for the Appointment and Nomination of Office Bearers and Members of Public Institutions under the Ministry of Finance, 2073.”
Through this amendment—approved by the Cabinet upon the Finance Ministry’s proposal—the revised criteria also applied to NRB. However, a writ petition was filed against this change at the Supreme Court on Chaitra 29. On Baisakh 3, the Court issued a show cause order to the government, effectively restoring the 65-year age cap for the Governor’s appointment.
Legal Disputes in the Appointment Process
Meanwhile, aspirant Dr. Bishwo Paudel is facing a writ petition in the Supreme Court. Advocates Pratibha Upreti and Bishal Thapa have filed the case, arguing that appointing a political party member as Governor violates the NRB Act, 2058.
According to Section 21(a) of the Act:
“A member of a political party shall not be eligible for appointment as Governor.”
The petitioners have requested the Court to block Paudel’s appointment, as it contradicts this provision.
Previously, the same lawyers had filed writ petitions against Dr. Gunakar Bhatta’s candidacy and against the Finance Ministry’s amendment to remove the age limit.
Additionally, former Governor Vijayanath Bhattarai resigned from the Recommendation Committee, expressing dissatisfaction over its inaction. In his place, the government appointed outgoing Governor Maha Prasad Adhikari as a member of the committee. This appointment too has been challenged at the Supreme Court. The Court has summoned both parties for a hearing on Jestha 4.
