Nepal Rastra Bank (NRB) Governor Dr. Bishwanath Paudel has stressed the need to modernize the Nepal Rastra Bank Act to align with international standards and strengthen the country's banking system.

Speaking before the House of Representatives' Finance Committee during discussions on the proposed amendment to the Nepal Rastra Bank Act, 2058, Governor Paudel emphasized that the legislation should reinforce the independence of the central bank while addressing emerging challenges in digital finance and international financial compliance.

He noted that central bank independence has become a global standard since the 1990s and said Nepal must update its legal framework to strengthen digital payment systems, QR-based transactions, and future digital currency initiatives while avoiding the risk of being placed on the FATF grey list.

Paudel also argued that the current composition of the NRB Board of Directors remains appropriate, stating that the presence of the Finance Secretary improves coordination between the government and the central bank rather than undermining its independence.

He urged lawmakers to reconsider the proposed requirement of 10 years of work experience for the appointments of the Governor and Deputy Governors, arguing that individuals who have already served as secretaries, university professors, or vice-chairpersons of the National Planning Commission possess sufficient qualifications.

The Governor also opposed the proposed cooling-off period for retired senior NRB officials, saying the government should retain the flexibility to appoint experienced professionals to important public positions whenever necessary.

He further stated that any committee formed to investigate the Governor should be chaired by a retired Supreme Court justice, reflecting the constitutional status and institutional dignity of the office.

Additionally, Paudel argued that the existing objectives of the central bank remain adequate and that decisions regarding profit distribution and transfers to the government should continue to rest with the NRB Board, enabling the bank to independently manage inflation, liquidity, and broader macroeconomic stability.