Central bank must be free from political interference: Finance minister

KATHMANDU: Finance Minister Dr Swarnim Wagle has said there should be no political interference in the central bank that would allow the governor to be transferred or dismissed like a regular government employee.

Speaking at a primary discussion on the bill to amend the Nepal Rastra Bank Act, 2058, organised by the Public Accounts Committee at Singha Durbar today, Wagle warned that political involvement in the central bank would have dire consequences.

“The Nepal Rastra Bank Act, 2058 incorporated several appreciated aspects. The act also specified arrangements to make the governor's appointment permanent,” he said, adding, “The governor should not be dismissed or transferred from one office to another like in bureaucracy. The central bank is supposed to be an autonomous and independent institution. Political involvement can be detrimental in such institution.”

Wagle highlighted the need to update the central bank act while welcoming debate that strengthens support for its autonomy.

“We are also trying to modernise the structure and board of the central bank,” he said, outlining efforts to streamline the appointments, duties and responsibilities of the governor and directors.

Dr Wagle said the bill includes provisions to ensure that actions taken with good intentions are not penalised.