Discover how political power plays have stalled the Nepal Rastra Bank governor appointment, risking economic stability and public trust. Full story inside.

Imagine a ship sailing through rough economic waters, but without a captain to steer it. That is exactly what is happening with Nepal Rastra Bank right now.

The term of the previous governor, Maha Prasad Adhikari, officially ended on April 4, 2025. By law, a new governor should have been appointed one month before the end of his term. But here we are, in mid-May, and Nepal Rastra Bank still does not have a permanent governor.

Instead, Deputy Governor Dr. Neelam Dhungana Timsina has been appointed as the acting governor to keep day-to-day operations running. However, this is merely a stopgap, not a long-term solution. Ironically, Nepal Rastra Bank remains without a permanent governor precisely when the Nepal Government is preparing to present the national budget in Parliament, a time when strong central bank leadership is crucial.

So, why is Nepal Rastra Bank, the central bank responsible for the entire country's financial system, left without a leader? The answer is a mix of politics, power struggles, and personal ambitions.

Before we dive into the drama, let’s first understand how the appointment of Nepal Rastra Bank’s governor is supposed to happen by law.

The Legal Process: How Nepal Rastra Bank Gets its Governor

Nepal Rastra Bank is not just another government office. It is the central bank of Nepal, responsible for managing the country's money supply, controlling inflation, stabilizing prices, and keeping the entire banking sector in check.

Because of this huge responsibility, the law wants to make sure that the appointment of the governor is done carefully, fairly, and without political influence.

What Does the Law Say?

According to the Nepal Rastra Bank Act, here’s how a governor should be appointed:

1. A Recommendation Committee is Formed:
   • The government forms a 3-member committee.
   • This committee includes:
     • The Finance Minister as the Coordinator.
     • One former governor of Nepal Rastra Bank.
     • One renowned expert in economics, banking, finance, commerce, or law.
2. Committee Recommends 3 Names:
   • The committee selects three qualified candidates.
   • These candidates must have experience in economic, banking, or financial sectors, or be current deputy governors.
   • The names are then sent to the Council of Ministers.
3. Council of Ministers Appoints the Governor:
   • From the recommended three, the government picks one person as the governor of Nepal Rastra Bank.

Why is This Process Important?

The law has designed this process to ensure that the person leading Nepal Rastra Bank is:

• Qualified.
• Experienced in the financial sector.
• Independent from political influence.

In short, this is to protect Nepal Rastra Bank’s autonomy. The central bank should not act based on the interests of political parties. It should act for the health of Nepal’s economy.

Click here to learn more about the role of NRB

But sadly, the very process meant to protect Nepal Rastra Bank’s independence is now being delayed and manipulated. And that’s where the drama begins.

The Recommendation Committee That Didn’t Meet

Now that we know how the governor of Nepal Rastra Bank is supposed to be appointed, let’s talk about what actually happened.

On March 24, 2025, the government formed the required recommendation committee to suggest the next governor of Nepal Rastra Bank. The members were:

• Bishnu Prasad Paudel (Finance Minister) - Coordinator
• Bijaya Nath Bhattarai (Former Governor of Nepal Rastra Bank)
• Prof. Dr. Bishwo Poudel (Renowned economist)

By law, this committee had a clear job: meet, evaluate candidates, and recommend three names for the governor post. Simple, right?

But here’s the shocking part: the committee never held a single meeting.

That’s right. Weeks went by after Maha Prasad Adhikari’s retirement, yet there was no progress. The recommendation committee remained inactive, failing to even hold a single meeting. Meanwhile, behind-the-scenes political negotiations were in full swing, with potential candidates’ names already making headlines.

Frustrated by this, Bijaya Nath Bhattarai, the former governor, decided to quit the committee. He publicly stated that there’s no point in staying on a committee that has not been taken seriously.

This is a clear failure of governance. Allegedly, the legal process was deliberately ignored, raising serious questions about political intentions behind the delay.

Why would anyone want to delay appointing the next governor of Nepal Rastra Bank? The answer lies in the intense power struggle that follows.

Acting Governor Neelam Dhungana Timsina: Holding the Fort or Holding the Seat?

Since no one bothered to appoint a new governor, someone had to keep the lights on at Nepal Rastra Bank.

So, the Finance Minister did what seemed logical: he appointed Deputy Governor Dr. Neelam Dhungana Timsina as the acting governor.

Problem solved? Not quite.

You see, Neelam Dhungana herself wants to be the next permanent governor. In fact, she’s campaigning hard to be the first woman governor of Nepal Rastra Bank.

Now, here’s where things get complicated.

One of her biggest competitors, Gunakar Bhatta, who was an Executive Director at Nepal Rastra Bank, resigned from his post to qualify for the governor’s race.

But there’s a catch.

For his resignation to be valid, it has to be accepted by the acting governor. And who is that? Neelam Dhungana.

So essentially, his rival is the one holding his resignation letter. And she’s in no rush to sign it.

Her official reason?

“A permanent governor should approve such resignations, not an acting one.”

She even clarified that she only processes resignations from employees below the executive director level. And since she’s also a candidate for the governor’s seat, she claims it would be a conflict of interest to approve a rival’s resignation.

However, when the Finance Minister himself asked her to approve Bhatta’s resignation, she still refused. This refusal is widely seen as a clever way to block a strong competitor and buy herself time.

While all this drama unfolds, Nepal Rastra Bank remains headless. And what follows is even more interesting. 

The Candidates & The Political Tug of War

Let’s be honest. The race to become the next Nepal Rastra Bank governor is less about merit and more about who has the better political backing.

Here’s a closer look at the main players and why their names matter.

Neelam Dhungana Timsina Holding All the Cards

First, we have Neelam Dhungana, the acting governor of Nepal Rastra Bank.

Basically, she’s already in the seat. But she wants the title permanently.

Her pitch is strong: become the first woman governor of Nepal Rastra Bank.

She has powerful political connections, from former President Bidya Devi Bhandari to KP Sharma Oli’s family and Arju Deuba.

But her refusal to accept rival Gunakar Bhatta’s resignation has raised serious questions. Is she guarding the institution, or guarding her own shot at the top?

Gunakar Bhatta: The Candidate Stuck in Limbo

Bhatta, an Executive Director of Nepal Rastra Bank, was widely considered a top choice. Both Prime Minister KP Sharma Oli and NC President Sher Bahadur Deuba had reportedly agreed on his name.

But legally, there’s a problem.

The Nepal Rastra Bank Act has made it clear:

You can appoint a governor from among experts or deputy governors, but not directly from the executive director post.

This isn’t new.

Back in 2009, the same rule blocked Yuba Raj Khatiwada’s appointment. He was an executive director too. So, they had to pick Bijaya Nath Bhattarai instead.

Khatiwada only became the 15th governor in 2010, after he was no longer in that executive role, making him legally eligible.

Bhatta tried to follow the same path by resigning, but with Neelam Dhungana Timsina holding up his resignation, he’s stuck in a legal deadlock.

Gyanendra Prasad Dhungana: The Perfectly Timed Resignation

Gyanendra Prasad Dhungana, the former CEO of Nabil Bank, was also seen as a strong contender initially. He resigned from his position on March 25, 2025, just over a week before Maha Prasad Adhikari’s term as governor ended.

But Gyanendra’s case is even more tangled.

Nabil Bank’s foreign investor, NB Holdings International, is currently under investigation. There are allegations that this "foreign" company might actually be linked to Chaudhary Group, a Nepali business giant. If true, this would violate rules that Nepali companies cannot invest in Nepal as foreign investors.

Due to these ownership concerns, Nepal Rastra Bank has frozen dividend payments to NB Holdings, which holds a 50% stake in Nabil Bank, until the true ownership is clarified.

If Gyanendra Dhungana, former CEO of Nabil, becomes governor, wouldn’t that conveniently solve the problem for certain business houses? That’s why most people believe his name is being heavily lobbied.

Prof. Dr. Bishwo Poudel: From Referee to Player

Here’s where things have taken an interesting turn lately.

Prof. Dr. Bishwo Poudel, a respected economist and former vice-chair of the National Planning Commission, was supposed to help select the next governor of Nepal Rastra Bank.

Somewhere along the way, he became the top choice himself.

So, how did the referee become a player?

With Neelam Dhungana blocking Gunakar Bhatta’s resignation and no consensus on other candidates, political heavyweights needed a quick fix. Both Nepali Congress (NC) and CPN-UML wanted control over Nepal Rastra Bank,  but neither wanted to back down.

The compromise? Let’s pick Poudel.

There was just one problem: As a sitting member of the recommendation committee, Poudel couldn’t be nominated. The solution was simple. He resigned on May 11, clearing the path.

This deal was reportedly sealed at a high-level meeting with top leaders including PM Oli, Deuba, Finance Minister Bishnu Paudel, and Arzu Rana Deuba.

No one questions Poudel’s credentials. But let’s be honest, this wasn’t about merit. 

It was pure political bargaining.

And just when you thought the drama couldn’t get any messier,  it did.

On May 13, a writ petition landed in the Supreme Court challenging Dr. Bishwo Poudel’s candidacy. The argument?

Since Poudel is linked to a political party, appointing him would violate the Nepal Rastra Bank Act, which demands political neutrality for the governor's role.

And let’s be honest, this latest court case will only drag out the appointment process even further.

While politicians bargain and legal battles heat up, Nepal Rastra Bank remains leaderless, and Nepal’s economy waits in suspense for a governor who might actually get to take office.

A History of Political Interference in Nepal Rastra Bank

If you think this is the first time politicians are trying to meddle with Nepal Rastra Bank, think again.

One of the biggest examples was the public feud between Finance Minister Janardan Sharma (from the Maoist party) and Governor Maha Prasad Adhikari (seen as close to UML).

It got so bad that Sharma actually suspended the sitting governor. Imagine that. The head of Nepal Rastra Bank, whose main job is to keep the country’s economy stable, was thrown out because of political differences.

But the story did not end there.

Adhikari took the matter to court. The Supreme Court reinstated him, ruling that the suspension was illegal. This case was a landmark moment that showed just how fragile the independence of Nepal Rastra Bank really is when political interests get involved.

Despite all this, throughout his term, Maha Prasad Adhikari stood firm. He resisted political pressure, focused on monetary stability, and maintained Nepal Rastra Bank’s image as an autonomous institution.

Ironically, now that his term is over, the appointment of his successor has become an even bigger political game.

The very institution that is supposed to be independent, neutral, and policy-driven is once again being pulled into the web of political interests.

This pattern has repeated over the years. Political parties see Nepal Rastra Bank as a prize. Controlling it means controlling key decisions on loans, foreign exchange policies, and banking regulations. In other words, it is about having influence over the country’s money matters.

But every time this happens, the bigger victim is not the central bank. It is the entire financial system of Nepal.

Why Nepal Rastra Bank’s Autonomy Matters

Let’s pause for a moment and ask a simple question.

Why does it even matter who becomes the governor of Nepal Rastra Bank?

After all, isn’t it just another high-level post?

Actually, no. The governor of Nepal Rastra Bank is like the referee of Nepal’s financial game. Whether it is controlling inflation, regulating banks, managing foreign exchange reserves, or stabilizing the economy, the central bank has a huge role to play.

If this referee is biased or politically influenced, the entire game becomes unfair.

For example:

• Interest rates could be manipulated to favor certain business groups.
• Policies could be designed to suit political allies rather than the country’s economic needs.
• Banking regulations might be loosened to help powerful players while the general public suffers.

That is why the Nepal Rastra Bank Act clearly outlines that the central bank should function independently. Its leadership must be chosen based on expertise, not political loyalty.

When politicians interfere in Nepal Rastra Bank’s leadership, it sends a wrong message to:

• Investors
• International financial institutions
• The general public

It creates uncertainty in the market. People lose trust in the banking system. Foreign investors hesitate. Economic policies become unstable.

In February 2025, Nepal was placed back on the FATF grey list. This happened because we failed to meet international standards on money laundering and terrorism financing.

The consequences are serious:

• Nepal faces more scrutiny on international transactions.
• Foreign investors lose confidence.
• International banks and financial institutions become cautious in dealing with Nepal.

And who is responsible for fixing this? Nepal Rastra Bank.

But without a permanent, capable governor, Nepal’s efforts to meet FATF standards are slow and unconvincing. Political infighting over the appointment delays real reforms, making it harder for Nepal to exit the grey list.

This delay signals to the world that Nepal lacks the political will to strengthen financial governance.

Other Implications of the Delay

The impact goes far beyond FATF compliance:

• Inflation is rising, making everyday essentials costlier. NRB’s policy tools remain underutilized without a strong leader.
• Investor confidence is shaken. Businesses see a central bank caught in political games, not in policy-making.
• The Nepali rupee keeps weakening, yet no decisive monetary measures are taken.
• The banking sector lacks clear direction, risking regulatory slippages.

Every day without a permanent NRB governor means Nepal loses precious time to act on these issues.

The Irony of the Situation

Let’s take a step back and look at how ironic this whole situation has become.

Nepal Rastra Bank was established to be an independent institution, a protector of Nepal’s financial stability, free from political interference. Its job is to look after the economy, not the interests of political parties or business lobbies.

But what are we seeing today?

The appointment of its governor has turned into a political power play. Instead of asking, “Who is best suited to manage Nepal’s economy?”, the question has become, “Whose person will get the seat?”

The same politicians who once demanded Nepal Rastra Bank’s autonomy are now treating the governor’s post like a bargaining chip.

Each party wants “their person” to be in that chair. Not because they care about inflation or monetary policy. But because having influence over Nepal Rastra Bank means having the power to:

• Push favorable policies
• Resolve sticky business disputes
• Control financial regulations

This is not a new game. But it has reached a point where even the basic legal procedures are being ignored.

The recommendation committee formed to select the next governor did not hold a single meeting. The acting governor is refusing to accept resignations of rival candidates. Candidates are being negotiated like political favors, not selected for expertise.

It is ironic, and frankly, a bit tragic, that Nepal Rastra Bank, whose main job is to ensure economic discipline, has itself become a victim of political indiscipline.

The longer this drama continues, the more damage it does to the credibility of Nepal Rastra Bank. 

Conclusion: What’s at Stake for Nepal’s Economy

So, why should you care about who becomes the next governor of Nepal Rastra Bank?

Because this is not just an internal appointment. It affects every Nepali citizen.

When Nepal Rastra Bank’s leadership is decided based on political deals, the decisions made by the central bank become biased. This can lead to:

• Poor monetary policies that favour certain businesses
• Mismanagement of foreign reserves
• Weak regulation of banks and financial institutions
• Loss of investor confidence
• Economic instability

And who suffers the most from this? Ordinary people. Businesses struggle, jobs are affected, prices rise, and the entire economy feels the shock.

The governor of Nepal Rastra Bank should be someone with experience, integrity, and independence. Not someone planted by political powerhouses to serve narrow interests.

The ongoing delay and political tug of war over this appointment send a very wrong signal. It shows that even critical economic institutions are not safe from political interference.

If Nepal Rastra Bank is to maintain its role as the guardian of Nepal’s financial system, the appointment process needs to be transparent, timely, and based on merit.

This is not just about filling a vacant post. It is about safeguarding the future of Nepal’s economy.

Nepal Rastra Bank deserves better. And so does Nepal.

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