18 MPs Propose Amendments to Nepal Rastra Bank Bill

Kathmandu. Eighteen MPs have registered amendment proposals in the Nepal Rastra Bank (Third Amendment) Bill under consideration in Parliament. The MPs registered amendment proposals within the deadline for amendments as per the House of Representatives rules. The proposed amendments mainly include the use of digital technology, qualifications of directors, regional concept, and financial good governance.

The MPs who have submitted amendments include Parshuram Tamang, Prof. Dr. Pushparaj Kandel, Bidushi Rana, Anushka Shrestha, Lima Adhikari, Ganesh Karki, Santosh Subba, Wasana Thapa, Khushbu Oli, Madan Krishna Shrestha, Ashuda Kumari Baral, Dr. Krishna Hari Budhathoki, Ramesh Kumar Mall, Sushil Khadka, Samiksha Baskota, Kamal Subedi, Ganesh Parajuli, and Guru Prasad Baral.

Proposal for Regional Bank Concept

With the development of digital banking, there is a demand that the Act should also recognize the regional structure. MP Parshuram Tamang has submitted an amendment to establish the concept of regional banks in the Act itself by adding the words 'digital bank as well as provincial bank'. Similarly, MP Samiksha Baskota has proposed to add words so that credit cards, along with debit cards, are given legal recognition as the use of financial instruments increases. She has proposed to keep English words like 'macroprudential' as they are and to strictly bind the issue of directors maintaining confidentiality in the Act.

Stricter Director Qualifications, Cooling Period Provision

MPs have shown the most interest in who will be on the board of directors of the Rastra Bank. MPs Bidushi Rana, Santosh Subba, Wasana Thapa, Madan Krishna Shrestha, Khushbu Oli, and Ramesh Kumar Mall have demanded a clear definition of the work experience required for directors. They have registered proposals stating that only individuals with at least ten years of experience as a distinguished class official of the Government of Nepal, a university professor, or in an executive position in a commercial bank or international financial institution should be considered qualified. Further tightening this, MP Khushbu Oli has proposed a mandatory provision that a person who has retired as the Chief Executive Officer (CEO) of a commercial bank must complete a cooling-off period of at least 3 years to become a director of the Rastra Bank. Another MP, Guru Prasad Baral, has proposed an amendment that at least 2 years must have passed after separating from the position of CEO of a commercial bank to be appointed as Governor. MP Lima Adhikari has demanded the addition of a provision that former employees of the Rastra Bank who wish to become directors must have completed two years after retirement. On the other hand, MP Gopal Sharma has proposed to abolish some old clauses related to director qualifications. MP Parshuram Tamang, however, has expressed a different opinion, suggesting that the experience requirement for directors should be reduced from ten years to seven years.

Proposal to Clarify Legality of Digital Banks to Virtual Currency

Proposals for clear legal provisions regarding digital banking and cryptocurrency have also been made. MPs Sushil Khadka, Ganesh Parajuli, and Kamal Subedi have submitted amendments to define Central Bank Digital Currency (CBDC) and to give legal recognition only to digital currency issued by Nepal Rastra Bank. MP Ganesh Parajuli has proposed to clearly state that virtual or crypto currencies issued privately will not be considered legal tender by this Act and to completely prohibit the transaction of virtual assets without a license. Considering the increasing cyber risks, MP Ganesh Karki has registered a proposal that the Rastra Bank should make special regulatory arrangements to minimize the damage that service recipients may suffer from electronic fraud, phishing, and unauthorized electronic access.

Demand to Reduce Governor and Deputy Governor Tenure

MPs have given important suggestions to make the appointment process of Governor and Deputy Governor more transparent. MPs Ramesh Kumar Mall, Khushbu Oli, and Lima Adhikari have proposed a provision that for the recommendation of Deputy Governor appointments, a list of twice the number of vacant positions should be recommended from among the distinguished class officers of the Rastra Bank based on their performance. MP Sushil Khadka has proposed a new provision to reduce the tenure of Governor, Deputy Governor, and Directors from 5 years to 4 years, and that individuals recommended from outside for Deputy Governor should not be older than 50 years. Besides this, MPs have proposed to make women's participation mandatory on the Rastra Bank board and to announce the monetary policy on the first day of the fiscal year to make the formulation and public announcement of monetary policy more accountable. Prof. Dr. Pushparaj Kandel has proposed the democratic practice of submitting and discussing the report on the implementation of monetary policy every three months in the Federal Parliament.