KATHMANDU, April 7: The government has appointed Maha Prasad Adhikari, who is currently the CEO of the Investment Board of Nepal, as the 17th governor of the Nepal Rastra Bank (NRB).
A meeting of the Council of Ministers held on Monday decided to pick Adhikari, a chartered accountant, as the new governor of the country's central bank. He will succeed Chiranjibi Nepal, who retired from the post of the NRB head on March 18 after completing his five-year term.
Earlier on Monday, a recommendation committee headed by Minister for Finance Yuba Raj Khatiwada had tabled a list of three candidates along with Adhikari at the cabinet meeting for appointment as central bank's governor. Chintamani Shiwakoti, a deputy governor of NRB, and former government secretary Keshav Bhattarai, were the other two candidates recommended by the committee.
The central bank is not a new office for the newly appointed governor. Adhikari, who started his career as an assistant at the NRB in 1985, spent three decades of his life in the central bank and retired from service as a deputy governor in December 2015. Interestingly, he was recommended to the post of the central bank's chief by Finance Minister Khatiwada who had also chosen him as his deputy governor while he was the NRB governor in 2010. As a deputy to the then Governor Khatiwada, Adhikari is also credited for helping the central bank cope with the global financial crisis of 2008 triggered by the real estate bubble.
A step forward, but not enough
Adhikari's return to the NRB after four years to lead the central bank comes at a time when threats of economic and financial crisis loom larger due to the Covid-19 pandemic.
During his three decades at the central bank, he had worked in banking operation, financial management, bank regulation, and supervision and inspection sectors.
Many former and current central bankers see him as a trusted 'lieutenant' to former Governor Khatiwada in combating the financial crisis which even prompted the central bank to take over nearly a dozen troubled banks and financial institutions (BFIs) for their revival. His role as a formidable regulator is partly attributed to restoring financial stability in the country at that time.
Even during the tenure of the NRB Governor Nepal, the then deputy governor Adhikari was a key figure in raising the paid-up capital of banks by up to four folds.
Compared to his role as a central bank regulator which drew him accolades, he, however, did not leave his mark in the Investment Board of Nepal. Despite holding two international summits to attract foreign investment, there hasn't been any significant growth in the foreign investment in the country in the last few years. His four-year term at the IBN was coming to an end in June.
While his three-decade career with the central bank provides him knowledge and expertise to drive the banking and financial sector, his new role however is also fraught with challenges.
Experts say the financial and economic crisis going to be caused by the Covid-19 will put his leadership role in the central bank to the test.
“Based on the expertise and knowledge he had gained in the central bank, he has an opportunity to utilize it again,” said Deependra Bahadur Kshetry, a former NRB Governor. “But, his leadership role will come into test immediately from the day he is sworn in as the governor. He has to come up with measures and monetary policies to make sure that there is no crunch of resources in the productive sector battered by the pandemic,” he added.
Even Adhikari himself sees the combat against Covid-19 as his first challenge. “This is of course a challenging time. The first and foremost priority would be to contain the adverse impacts of coronavirus in the financial and economic sectors,” Adhikari told Republica.
