The decision was finalized during the committee's 30th meeting. Committee Chair Krishna Hari Budhathoki described the outcome as a "unanimous decision amidst dissent," noting that members chose to advance the bill despite individual reservations. Budhathoki defended the changes, claiming they reinforce institutional independence while increasing government accountability.
However, the move has triggered pushback from lawmakers and financial experts alike. Lawmakers Pushpa Raj Kandel and Parshuram Tamang formally registered written notes of dissent. Kandel argued that a shortened three-year term—with a potential two-year extension—would compromise leadership stability at the central bank.
Key Provisions of the Amended Bill
Alongside the adjustment to the governor's term, the committee-endorsed report features several major regulatory shifts:
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Leadership Tenure: The tenure for the governor and other directors is set at 3 years, with provisions to add 2 more years as needed.
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Shareholding Restrictions: Individuals holding more than 0.5% shares in any bank or financial institution (BFIs) are barred from serving as governor or director.
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Monetary Policy Timeline: The central bank must make its monetary policy public annually by July 1.
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Cooling Period for CEOs: A bank or financial institution CEO may qualify to become governor, provided they complete a mandatory 2-year cooling period.
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Government Directives: A new provision explicitly allows the government to issue necessary directives to the Nepal Rastra Bank.
Pushback Over Central Bank Autonomy
The proposed changes have drawn sharp criticism from former finance ministers and former central bank governors. Opponents warn that shortening the tenure and granting the government direct authority to issue instructions threatens the autonomy of the monetary authority. Critics argue that a vulnerable tenure will force governors to prioritize political appeasement over economic stability out of fear for their positions.
With the committee's endorsement secured, the revised report will now be submitted to the House of Representatives for final approval.
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