The government has formed a probe committee to investigate Nepal Rastra Bank Governor Maha Prasad Adhikari on the charge of leaking sensitive information about the government’s decisions and not fulfilling his responsibilities effectively. With this, Adhikari has been automatically suspended from the post.

Sources said the government has formed a three-member investigation committee headed by former Supreme Court judge Purushottam Bhandari with Surya Thapa and Chandra Kanta Poudel as members. The committee has been given a month to submit its report.

“I have been informed that a probe committee has been formed,” Adhikari told the Post. “I have no further information on the committee, or on the reasons for forming the committee.”

Press chief to Prime Minister Sher Bahadur Deuba, Govinda Pariyar, also confirmed to the Post that Adhikari was suspended as governor and a three-member probe committee was formed on Friday.

Deputy governor Nilam Dhungana Timilsina has been given the responsibility of acting governor after Adhikari’s suspension.

Section 22 and its sub-section 5 of the Nepal Rastra Bank Act-2002 have detailed the conditions that allow removal of the governor, deputy governor and directors of the central bank. They can be removed if they fail to do the due diligence, lack efficiency, harm the country’s banking and financial system, or if they are found to have acted dishonestly or with mala fide intention in any transaction related to the business of the bank among other things, according to the Act.

This is the second time a sitting governor has been suspended.

In August 2000, the then Finance Minister Mahesh Acharya had sacked governor Tilak Rawal without giving any reason, and appointed Dipendra Purush Dhakal in Rawal’s place. Later, after the Supreme Court reversed the decision, Acharya resigned as minister.

In June 2007, governor Bijay Nath Bhattarai was suspended after the Commission for the Investigation of Abuse of Authority filed a case at the Special Court accusing him of hiring foreign consultants [KPMG] at the bank. The chargesheet said the hiring cost the country Rs25 million although the consultants never visited Nepal.

The anti-graft body had accused Bhattarai of causing losses worth Rs24.5 million to state coffers by not claiming compensation even after terminating the consultancy agreement.

During a Cabinet meeting on Thursday, some ministers had questioned the working style of Adhikari and accused him of leaking sensitive information to the media, a senior government official said. The decision to form the probe committee came afterwards.

Prime Minister Deuba is reportedly unhappy with the governor’s performance as sensitive information on the government’s decisions were being leaked, a minister told the Post.

Adhikari was appointed as Nepal Rastra Bank’s 17th governor on April 6, 2020, after governor Chiranjivi Nepal completed his five-year tenure on March 17.

Before that Adhikari was serving as chief executive officer of the Investment Board Nepal.

Insiders say the sudden decision to suspend Adhikari comes on the heels of the news about Nepal Rastra Bank’s hesitancy in releasing Rs400 million transferred from abroad in the account of one Prithvi Bahadur Shah, which was covered by Kantipur, Post’s sister publication.

The relation between Finance Minister Janardan Sharma and governor Adhikari had been souring for a long time.

In August last year, Finance Minister Sharma had expressed dissatisfaction over the leak of information related to the monetary policy 2021-22 before its official announcement.

The suspension of the governor has come at the time when the country’s economy is facing severe stress and also three sets of elections that may lead the country’s financial system into the doldrums, according to experts.