By Gopal Sharma
KATHMANDU (Reuters) – Nepal has named economist Biswo Nath Poudel as its new central bank governor, a minister said on Wednesday, ending a long-running discord between allies of the Himalayan nation’s ruling coalition over the choice.
Nepal’s cabinet appointed the 49-year-old Poudel as the governor of Nepal Rastra Bank (NRB) late on Tuesday, Prithvi Subba Gurung, minister of communications and information technology, told Reuters.
Poudel, a former economic adviser at the International Labour Organization (ILO), replaces Maha Prasad Adhikari, who retired at the end of his five-year term on April 7.
The central bank chief’s position was vacant for over 40 days as allies in Prime Minister K.P. Sharma Oli’s ruling coalition failed to reach an agreement over a candidate.
Poudel is considered close to the centrist Nepali Congress party, the biggest constituent in the ruling coalition, which threatened to walk out of the government over the disagreement over the candidate, according to local media reports.
Poudel faces an immediate challenge of improving the health of the banking sector, analysts said.
“Quality of banking assets have substantially eroded which must be corrected immediately,” said Rameshwar Khanal, a former finance secretary. “Borrowers have misused loans and commercial banks need to be supervised better,” Khanal added.
Poudel also faces the challenge of taking the country out of the “grey list” of the Financial Action Task Force (FATF), a global anti-money laundering watchdog.
(Reporting by Gopal Sharma; Editing by Sudipto Ganguly; Editing by Saad Sayeed)
