Kathmandu- With Governor Maha Prasad Adhikari's five-year tenure nearing its end, institutional governance at Nepal Rastra Bank (NRB) has been deteriorating.
Governor Adhikari’s term concludes on April 7, but he will take a mandatory 10-day leave starting March 18.

The Governor has delegated his departments to the two deputy governors. However, Deputy Governors Dr. Nilam Dhungana Timalsina and Bam Bahadur Mishra have neglected their responsibilities, focusing instead on the race for the governor. They have been lobbying political powers to secure their inclusion in the recommendation committee for the new governor’s appointment. It has adversely affected the central bank’s regulation and supervision functions.

One significant impact is the NRB's inability to publish monthly statistics on time. As of March 9, the Economic Research Department has yet to release the macroeconomic report for the first seven months of the current fiscal year. This delay has also affected the timely publication of the monthly Banking and Financial Institution Statistics.

Similarly, the Department of Bank Supervision has not yet released the Key Financial Indicators (KFIs) of banks and financial institutions for the second quarter. The department attributes the delay to ongoing cross-verification of the banks' capital funds. Additionally, there have been delays in publishing the annual Bank Supervision Report and Financial Stability Report, which are typically issued by the NRB.

With the deputy governors failing to perform their roles effectively, other NRB employees have shown disobedience toward executive directors and directors. Meanwhile, some employees have been supporting executive directors seen as potential candidates for the next governor.

On another note, a peculiar situation arose involving Dr. Prakash Kumar Shrestha, a former NRB official who became a member of the National Planning Commission. His photo remained displayed in two different NRB branches for over a week. After the government appointed Shrestha to the commission, the Governor’s office assigned Dr. Gunakar Bhatta, the Executive Director of the Payment System, to oversee the Economic Research Department. Shrestha was reassigned to the Payment System and listed as on duty, while Kiran Pandit was appointed Acting Executive Director.

Even after Pandit’s promotion to executive director and Shrestha’s transfer to the Governor’s office, Shrestha’s photo displayed in both departments. His name was removed from the Payment System only last Wednesday, following media attention.

Two executive directors and economists at the NRB, Bhatta and Shrestha, are also in the spotlight as potential candidates for the next governor.

Amid this situation, Governor Adhikari intends to return to the office even after his mandatory leave. Under the provision requiring central bank employees to take 10 days of leave annually, Governor Adhikari will begin his leave on March 18.

He plans to return by April 5 and remain in office until the day before his term ends. If he is not reappointed, the NRB is preparing to bid him farewell on April 6.