Lawmakers want a shorter governor term. Experts fear instability in central bank
Summary
Lawmakers are pushing to shorten the Nepal Rastra Bank governor’s term from five years to three, triggering warnings that the move could weaken central bank independence and invite political interference. Experts and former governors say the proposed changes, along with other amendments to the NRB Act, could destabilize leadership and undermine policy continuity.
Key Points
- The parliamentary Finance Committee has proposed amendments to the Nepal Rastra Bank Act that would cut the governor’s term from five years to three, with a possible two-year extension based on performance.
- Former governors and finance leaders warn the change could weaken central bank autonomy, increase political interference and create unstable leadership.
- The committee has also retained government powers to issue directives to Nepal Rastra Bank and changed eligibility rules for the governor and directors.
- Central bank officials say the original amendments were driven partly by IMF-linked commitments, but several additional changes were later introduced in parliament.
