Process to appoint new NRB governor begins formally

KATHMANDU, Feb 25:

 With the incumbent Nepal Rastra Bank (NRB) Governor Yuba Raj Khatiwada´s five-year term coming to an end on March 20, the government has formally begun the process to appoint the new chief of the country´s regulatory bank.

The cabinet on Tuesday formed a three-member recommendation committee led by Minister for Finance Ram Sharan Mahat to recommend candidates for the new governor.

First NRB Governor Himalaya Shumsher JB Rana and Economist and former NRB board member Parthibeshwar Prasad Timilsina are the other members of the recommendation committee.

The cabinet formed the committee as per the Nepal Rastra Bank Act, 2002 which states that the Council of Ministers shall appoint the NRB Governor from among the names selected by the recommendation committee.

Though the cabinet took the decision on Tuesday, the committee will formally begin its work from Wednesday as the members are yet to get the appointment letter. The committee is expected to recommend the name of three candidates before March 20 when the post will become vacant.

According to NRB Act 2002, the committee has to recommend three persons renowned in the field of economic, monetary, banking, finance, commerce, management and commercial law, and from among the deputy governors. The cabinet will select the new governor from the three names recommended by the committee.

Knowledgeable sources at the finance ministry told Republica that internal lobby for the new governor has already begun. Aspiring candidates have already started to visit power centers. Most of them are close to the ruling party Nepali Congress.

Former Nepali Ambassador to US and Former Vice chairman of National Planning Commission Shankar Sharma, Prime Minister Sushil Koirala´s Economic Advisor Chiranjibi Nepal, Former Finance Secretary Yuvaraj Bhusal and Rastriya Banijya Bank Ltd Chairman Rewat Bahadur Karki, among others, are eyeing the post of governor.

The committee has to recommend one of the two deputy governors -- Gopal Prasad Kafle and Maha Prasad Adhikari.

As Finance Minister Mahat is from Nepali Congress (NC), sources say candidates close to the party is likely to lead the central regulator bank.

Economists, however, warn that appointment of governor on the basis of political affiliation could have a serious impact on preparation and implementation of monetary policy.

“The attempt to appoint governor in NRB on political basis, when its roles, responsibilities and challenges have multiplied, will be unfortunate for country´s economy,” former NRB Governor Bijaya Nath Bhattarai said in a recent interview to Republica

Source: Republica