Responsibilities of a dozen executive directors of Rashtra Bank have been changed

Dr. Bisha Poudel, the Governor of Nepal Rastra Bank (NRB), has ordered a significant reshuffle of nearly a dozen Executive Directors (EDs), who function as departmental heads. The decision, involving the transfer of 10 EDs and the posting of one, is set to be implemented tomorrow. According to a letter from the Human Resources Management Department uploaded on the NRB homepage today, the departmental responsibilities of seven out of the eighteen Executive Directors will remain unchanged.

Key Transfers and Controversial Moves

Rewati Prasad Nepal has been transferred from the Foreign Exchange Management Department to the Asset and Service Management Department. Nepal has previously faced serious accusations of involvement in obtaining undue benefits while serving as a Deputy Director in the Regulation Department and later as an ED in the Microfinance Institutions Supervision Department. Furthermore, he was accused of creating unnecessary obstacles for the public and banking institutions during his tenure at the Foreign Exchange Department.

In the latest shuffle, Ramu Paudel (Currency Management Department) has been moved to the Bank and Financial Institutions Regulation Department, while Bishrut Thapa (Human Resources) is now heading the Financial Institutions Supervision Department. Thapa was earlier moved to the Human Resources Department from the Currency Department in the first transfer decision after Dr. Poudel’s appointment as Governor. Dayaram Sharma Pageni (Monetary Management Department) has been assigned to the Governor’s Office. Guru Prasad Paudel (Regulation Department) has been shifted to the Human Resources Department. Notably, Ramu, Guru, and Dayaram all hail from Syangja district.

Other Transfers and Promotions

Kiran Pandit (Payment Systems Department), who was recently appointed as the bank’s spokesperson, will now lead the Foreign Exchange Management Department. Dr. Satyendra Timilsina has moved from the Financial Institutions Supervision Department to the Payment Systems Department. Roshan Kumar Sigdel (Asset and Service) is now in the Banking Department, and Dr. Dilliram Pokharel from the Banking Department has been transferred to the Monetary Management Department. Anuj Dahal (Institutional Planning and Risk Management Department) has been transferred to Currency Management, and Rajan Bikram Thapa from the Governor’s Office has been posted as ED of the Institutional Planning Department, having recently been promoted from Acting ED.

The transfers also bring up past decisions; former Governor Dr. Chiranjibi Nepal had placed economist Pitambar Bhandari in a non-specialist role (Human Resources) instead of the Economic Research Department. Similarly, Governor Poudel had kept Chartered Accountant Bishrut Thapa in Human Resources for the past six months instead of a supervision role.

Political Connection and The ‘National Son-in-Law’

Significantly, Dr. Ram Sharan Kharel, known in banking circles as the ‘National Son-in-Law,’ has not been transferred. He is the son-in-law of Dr. Yuba Raj Khatiwada, former economic and development advisor to then Prime Minister K.P. Sharma Oli. Deputy Governor Neelam Dhungana Timilsina, while serving as acting Governor last April, had fast-tracked Kharel’s promotion and assigned him his current department’s responsibility on the last day of Chaitra. It is speculated that Khatiwada has been lobbying intensely for his son-in-law to be appointed to one of the two Deputy Governor posts that will become vacant next February.

The strategy to install Neelam as Governor, Kharel as Deputy Governor, and Khatiwada secretly controlling the central bank was reportedly halted by the political unrest and protests in late August. Kharel’s non-transfer has fueled speculation, especially after he allegedly boasted of receiving a commitment from the Minister and Governor for the Deputy Governor position upon returning from the World Bank and IMF Annual Meeting in Washington last month. A staffer close to Kharel countered the ‘son-in-law’ speculation, pointing out that Kharel is not the only ED who is a relative of a former high-ranking official. Kharel’s career, which began in 1997 without the need for internal promotional exams, is largely attributed to the influence of his father-in-law, Dr. Khatiwada.

Rationale for Non-Transfer

A member of the NRB Board of Directors offered a more immediate explanation for Kharel’s status. The member stated that Kharel was the individual who “supported the Governor’s stance” on lowering the bank rate. While others opposed reducing the rate from 3%, Kharel presented a proposal of 2.75%, which the Governor supported, leading to its passage. The board member reasoned, “Why would the Governor transfer him after he supported the proposal?” Although Deputy Governor Neelam and others eventually supported the decision, two members had initially raised objections before signing the minutes and receiving their meeting allowance.