Outgoing Governor Maha Prasad Adhikari Offers 12 Key Recommendations to New NRB Governor for Economic Reform

As Governor Maha Prasad Adhikari completed his five-year tenure at Nepal Rastra Bank, he addressed a press conference reflecting on his accomplishments and challenges. In a parting gesture, he offered 12 strategic recommendations to newly appointed Governor Dr. Bishnu Paudel aimed at strengthening Nepal’s financial and economic systems.

Here are the highlights of his key suggestions:

1. Structural Reform and Focus on Productive Lending
   Nepal’s economy, heavily reliant on remittance and imports, needs a shift toward productive sectors. Adhikari stressed the need to channel financial resources from banks into productive investments to boost real economic activity and job creation.

2. Strengthen the Monetary Policy Advisory Committee
   Emphasized enhancing the role of the advisory committee through evidence-based policymaking and reinforcing the transmission mechanism for monetary policy.

3. Separate Monetary, Regulatory, and Foreign Exchange Policies
   Suggested clearly demarcating monetary policy from regulatory and FX policy to improve transparency and communication with stakeholders, enabling better public understanding of NRB’s mandates.

4. Review the Peg with Indian Rupee
   As the fixed exchange rate with the Indian Rupee has remained unchanged for years, he recommended a detailed study in light of structural economic changes in both countries.

5. Advance Green Finance Implementation
   Urged continued implementation and national adoption of the Green Finance Taxonomy (GFT) to address climate change and drive sustainable economic transformation.

6. Enhance Risk-Based Supervision with Technology
   Called for full utilization of the SupTech-driven supervisory system to prioritize data-driven, risk-focused financial oversight.

7. Promote Digital Payments and Redesign High-Denomination Notes
   While digital payments are rising, the circulation of physical currency has seen a rebound. He recommended thoroughly redesigning the NPR 1,000 note before printing and further investing in digital payment infrastructure, cybersecurity, financial literacy, and consumer protection.

8. Integrate Artificial Intelligence in Financial Supervision
   Suggested formalizing AI adoption within banks and the NRB for monitoring systems, data forecasting, and operational efficiency, backed by regulatory frameworks and staff capacity building.

9. Encourage Margin Trading in Capital Markets
   Recommended gradually reducing direct bank lending to the stock market and promoting margin trading through licensed brokers, supported by NRB’s policy coordination with other market institutions.

10. Align NRB’s Role with Federal Structure
    Suggested decentralizing NRB functions by transforming provincial offices into research, supervision, and public awareness hubs, along with upgrading physical infrastructure and staff skills.

11. Accelerate Infrastructure Projects
    Called for the swift relocation of NRB departments into newly built premises in Baluwatar and Thapathali, and initiating construction of office buildings in Bhaktapur (Bode), Surkhet, Biratnagar, Birgunj, and Nepalgunj.

12. Establish Specialized Structures for Data and Cybersecurity
    Recommended setting up a dedicated Statistics Department to consolidate all data activities and a separate cybersecurity unit to manage growing IT risks effectively.

These 12 recommendations are designed to help the new leadership at Nepal Rastra Bank modernize financial governance, enhance economic resilience, and guide Nepal’s economy toward inclusive and sustainable growth. How effectively they will be implemented under Governor Dr. Bishnu Paudel remains a key watchpoint.