22nd April 2025, Kathmandu
The appointment of the new Governor of Nepal Rastra Bank (NRB) has become a subject of legal and political debate as the government delays the selection process, raising questions over the eligibility of potential candidates, particularly Dr. Gunakar Bhatta, former Executive Director of NRB.
NRB Governor Appointment Delay
Legal Provisions and Delay in Appointment
The Nepal Rastra Bank Act mandates that the Governor must be appointed at least one month before the incumbent’s term ends, with a public notification issued. However, former Governor Maha Prasad Adhikari retired on Chaitra 24 (April 6), leaving the position vacant for over two weeks.
Despite the legal requirement, the government formed a recommendation committee only on Chaitra 11 (March 24), headed by Finance Minister Bishnu Prasad Paudel, with former Governor Bijaya Nath Bhattarai and expert member Dr. Vishwa Paudel. A month has passed since the committee’s formation, yet no meeting has been held to recommend candidates.
Political and Legal Complications
The delay stems from political negotiations between the ruling coalition partners—the Nepali Congress and CPN-UML—and a pending Supreme Court case challenging the removal of the age limit for Governor appointments.
As per the NRB Act, the committee must recommend three qualified candidates, from which the Cabinet appoints one. However, no names have been proposed yet. Meanwhile, a supplementary petition has been filed in the Supreme Court arguing that Dr. Bhatta, who recently resigned as NRB Executive Director, is ineligible for the Governor’s post.
Dr. Bhatta’s Resignation and Eligibility Debate
Dr. Bhatta resigned last Friday following NRB’s employee regulations, which require either a 30-day notice or payment of an equivalent salary. While his resignation process is complete, acting Governor Neelam Dhungana Timsina has yet to formally approve it.
The NRB Act (Sections 15 and 20) outlines the Governor’s qualifications:
Must be a Nepali citizen with high moral character.
Requires a postgraduate degree in economics, monetary studies, banking, finance, commerce, management, public administration, statistics, mathematics, or law.
Must have professional experience in the economic, monetary, banking, or financial sectors.
The Act clarifies “work experience” as holding high-ranking positions in the government, NRB, universities, commercial banks, financial institutions, or international organizations. Since NRB’s Executive Director is a “special class” position, Bhatta’s six-and-a-half-year tenure qualifies him.
However, critics argue that Section 21 disqualifies serving officials of commercial banks or financial institutions from becoming the Governor. Yet, this does not explicitly bar government or NRB officials. Legal experts, including senior advocate Prof. Dr. Gandhi Pandit, assert that NRB’s special-class employees are eligible.
Market and Legal Perspectives
Former Nepal Bankers Association President Bhuvan Dahal praised Bhatta’s decision-making abilities, citing his role in regulating banks and financial institutions. Bhatta also served on the Securities Board of Nepal, where he opposed overpriced IPOs, protecting public investors.
Academically, Bhatta holds a PhD in economics and a master’s in management, meeting the educational criteria. He is also not affiliated with any political party, fulfilling the “high moral character” requirement—unlike previous Governors Adhikari and Dr. Chiranjivi Nepal, who had political ties.
Supreme Court Hurdle
A writ petition challenging the removal of the age limit (previously 35-65 years) for Governor appointments is pending in the Supreme Court. On Baisakh 2 (April 15), the court issued an interim order halting the implementation of the amended criteria. A supplementary petition now argues that Bhatta is ineligible, though the bench has yet to hear it.
Conclusion
The delay in appointing a new Governor has left Nepal’s central bank in limbo. While Dr. Bhatta’s professional and academic credentials appear strong, legal and political disputes cloud his potential appointment. The Supreme Court’s upcoming decision will be crucial in determining whether he meets the eligibility criteria or if the government must look elsewhere.
For now, Deputy Governor Neelam Dhungana Timsina continues as acting Governor, with the NRB’s leadership crisis unresolved. The financial sector watches closely as the legal and political drama unfolds.
For more: NRB Governor Appointment Delay