Nepal Rastra Bank Board Should Not Have Finance Secretary, Proposes Lawmaker

A proposal has been made to exclude the Finance Secretary from the board of directors of Nepal Rastra Bank, the central bank of Nepal.

The proposal was put forward by lawmaker Lima Acharya of the Rastriya Swatantra Party (RSP) during a preliminary discussion on the ‘Nepal Rastra Bank Act, 2058 Amendment Bill’ at the parliamentary Finance Committee.

Lawmakers discussed the autonomy of the central bank, the structure of the board of directors, and contemporary reforms in the financial sector.

During the discussion, Acharya suggested that the Finance Secretary should not be a member of the board of directors to strengthen the autonomy of the bank.

She argued that the presence of the Finance Secretary could lead to direct interference from the executive in monetary policy.

Acharya also suggested that at least one female member should be included in the board of directors and that experts from outside the bank should be considered for the post of Deputy Governor.

She also proposed reducing the cooling-off period for bank employees from three years to two years and making the monetary policy committee more transparent by publishing its decisions.

Other lawmakers also presented their views on the bill, with some suggesting that the bank’s autonomy is necessary but not sufficient, and that the government’s strategic guidance is also necessary.

They also emphasized the need for the bank to adapt to new technologies and digitalization, and to address the risks associated with cryptocurrencies.

The discussion on the bill will continue in the next meeting of the Finance Committee.