Nepal’s Central Bank Autonomy Under Threat

Nepal’s central bank, the Nepal Rastra Bank, is facing a threat to its autonomy as the government begins to interfere in its operations.

Prime Minister Balendra Shah and Finance Minister Dr. Swarnim Wagle have been holding meetings with the bank’s officials, including the executive directors and CEOs of commercial banks, without the presence of the governor and deputy governor.

This move has been criticized by former governors of the central bank, who say that it undermines the bank’s autonomy and independence.

Government Interference

Former Governor Vijayanath Bhattarai said that the government’s actions are a clear indication of its intention to undermine the central bank’s autonomy.

‘The government is trying to control the central bank and its operations, which is not acceptable,’ he said.

Another former Governor, Dipendra Bahadur Kshetri, said that the government’s actions are a threat to the central bank’s independence and autonomy.

‘The government is trying to dictate the central bank’s policies and operations, which is not in line with the bank’s autonomy,’ he said.

Constitutional Provisions

The Nepal Rastra Bank Act 2058 has established the central bank as an autonomous body, with the power to regulate the country’s monetary policy.

The act also states that the governor and deputy governor of the central bank are appointed by the government, but they cannot be removed from their positions without the approval of the Supreme Court.

However, the government has been trying to remove the governor and deputy governor from their positions, which has been met with resistance from the central bank and its officials.

International Pressure

The International Monetary Fund (IMF) has also expressed concerns over the government’s interference in the central bank’s operations.

The IMF has suggested that the government should respect the central bank’s autonomy and independence, and not try to control its operations.

The government’s actions have also been criticized by the parliamentary committee on finance, which has said that the government should not interfere in the central bank’s operations.