Organizational Structure and Management of Nepal Rastra Bank
It is important to understand the organizational structure and management of Nepal Rastra Bank since it has an indirect effect on the economy. According to Nepal Rastra Bank Act and its preamble, it must operate and operate in accordance with these provisions. Organizational structure as well as management are two critical aspects that must be considered:
- The total responsibility of the Bank shall lie in the board of directors.
- The Board shall make rules for the conduct of business.
NRB’s policy-making board of directors is its most important component. A board of directors has ultimate authority in NRB. As a result, Nepal Rastra Bank’s Board of Directors (BOD) formulates policy and regulations at the highest level. To protect the economy from financial and monetary instability, the Board formulates and implements financial and monetary policies in accordance with the vision, policies, and programmers of government.
BOD of Nepal Rastra Bank includes Governor, two deputy governors, one member from Ministry of Finance, one member from Nepal Chamber of Commerce and Industry and other three nominated members from professional fields, such as Tribhuvan University if needed. The Government of Nepal appoints each of these members based on their experience and background. The Governor and two Deputy Governors are also appointed by the Government of Nepal. The government of Nepal selects one of the seven board members to serve as chairman for five years.
As Nepal’s central bank, Nepal Rastra Bank has several objectives that align with national economic goals. An emphasis has been placed on achieving the NRB’s goals during the design of its organizational structure. The main objectives of the NRB’s organization are:
- Facilitate the flow of information and decision making to reduce uncertainty,
- Define the positions and units within the organization and
- Help achieve the desired level of coordination.
In order to conduct the Bank’s day-to-day operations smoothly and efficiently, various departments, divisions, branches and sub-branches were created. Separate discussions will be given to different offices and departments. Nepal Rastra Bank has provided new organizational structures to encourage professionalism in the working of the central banking system to fit the changing context of the economy and monetary policy following deregulations and monitoring. Consequently, a governor is appointed by the board of directors, which is supported by audit committees, management committees, and internal audit departments.
In the hierarchy of the NRB’s organizational structure, two deputy governors follow the chairman. One deputy governor is responsible for regulation, supervision, and supporting services, and the other is responsible for monetary policy, foreign exchange policy, and banking operations.There are various departments between these two deputy governors to handle various tasks such as bank supervision, micro credit, foreign exchange management, monetary policy management, public debt management, research operations, legal arrangements, as well as monetary management, mint management, and banking offices as well as field offices.
Following numerous changes over time, the Bank now has 15 departments in its head office in Kathmandu along with the offices of its Governor and two Deputy Governors. The departments include
- Kathmandu Banking Office
- Issue Department
- Personnel Administration Department
- Banking Operations Department
- Development Finance Department
- Inspection and Supervision Department
- Foreign Exchange Department
- Research Department
- Public Debt Department
- Mint Department
- Banker’s Training Center
- Internal Audit and Inspection Department
- General Services Department
- Accounts and Expenditure Department
- Legal Department
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