Deputy governor appointment at Nepal Rastra Bank put on hold amid political transition

KATHMANDU: The process of appointing new deputy governors at Nepal Rastra Bank has been temporarily halted as the government waits for the formation of a new administration following the recent political transition.

Sources at the Ministry of Finance Nepal said that Finance Minister Rameshwar Khanal had held discussions with NRB Governor Biswo Nath Poudel and the finance secretary regarding the appointment process for the vacant deputy governor positions.

However, the process has been paused after leaders from the Rastriya Swatantra Party urged the caretaker government not to make major policy decisions or long-term appointments that could affect key institutions before a new government takes office.

According to a senior Finance Ministry source, one leader from the RSP directly contacted the finance secretary and requested that the interim government refrain from making long-term institutional appointments or promotions, including the deputy governor positions at the central bank.

“Given that a new and potentially strong government is expected soon, the finance minister believes it may send a better message if the deputy governor appointments are left to the incoming administration,” the source said.

Deputy Governor Positions Vacant

The development follows the completion of the five-year tenure of NRB deputy governors Nilam Dhungana Timilsina and Bam Bahadur Mishra, who formally left office on Sunday.

Both officials confirmed that their tenure at the central bank ended on the same day, leaving the two deputy governor positions vacant.

Governor Poudel had reportedly been preparing to recommend candidates for the posts to the finance minister. However, after consultations with the ministry, the shortlist of executive directors prepared for the recommendation has now been put on hold, according to sources familiar with the process.

Legal Provision for Appointment

Under the Nepal Rastra Bank Act, deputy governors must be appointed from among the central bank’s senior-most officials at the executive director level.

Currently, the central bank has 18 executive directors, from whom the governor must recommend four candidates to the Council of Ministers. The cabinet then selects two individuals from the recommended list to serve as deputy governors.

The law grants the governor significant discretion in preparing the shortlist for the government’s final decision.

Political Context Influencing Decision

Officials within the central bank acknowledge that the current political environment could affect the timing of the appointment.

One executive director at the central bank said it may be more appropriate for the incoming government to make the appointments.

“With elections already concluded and it clear which political force is likely to form the government, it would send a stronger institutional message if the new administration appoints the deputy governors rather than a caretaker government,” the official said.

Historically, the deputy governor appointment process in Nepal has sometimes taken up to two and a half months, depending on political and administrative circumstances.

If the incoming government holds a clear parliamentary majority, the decision could be made more quickly once the recommendation is submitted.

Government Yet to Decide

Finance Minister Khanal said the appointment ultimately depends on the government in office at the time of the decision.

“The deputy governor appointment is made by the government, but which government makes the decision depends on circumstances,” Khanal said. “Once the governor submits recommendations, the cabinet will take the final decision.”

Meanwhile, NRB board member Chintamani Siwakoti also suggested that, while the law does not prevent the current government from proceeding, it may be more practical for the incoming administration to handle the appointments.

“The election is already over and the current government is essentially functioning as a caretaker,” Siwakoti said. “Although the law does not stop the process, it would be more appropriate for the new government to make the decision.”

He added that the authority to recommend deputy governor candidates lies solely with the governor, and discussions on the matter have not yet taken place within the NRB board or with other internal stakeholders.