Amid delay in appointing the Nepal Rastra Bank governor, Nepali Congress President Sher Bahadur Deuba on Tuesday defended Prime Minister KP Sharma Oli, saying that an internal issue was to blame for the prolonged leadership void in the central bank.

The post has been vacant for more than a month after Maha Prasad Adhikari’s five-year term ended on April 4.

There’s no misunderstanding between the ruling partners on governor appointment, said Deuba on Tuesday, addressing an event at the party office.

Two executive directors of Nepal Rastra Bank—Gunakhar Bhatta and Prakash Shrestha—have put in their papers in what is perceived to be their preparation for landing the plum post. However, Acting Governor Neelam Dhungana has refused to approve their resignations, reportedly complicating the appointment process and allowing for speculations in the political, business and financial circles. Dhungana herself is said to be in the governor race.

But when the Congress, a key partner in the CPN-UML-led government, decided to back Bhatta, the process became more tangled. His opponents started their game and a case concerning the presumed appointment was filed in the Supreme Court.

Amid the delay, some observers even speculate that relations between the Congress and the UML have soured, which could ultimately lead to the collapse of the two parties’ partnership. But Deuba has denied the possibility.

The alliance is very much intact, Deuba said on Tuesday. The delay in governor appointment is due to an internal issue of the Nepal Rastra Bank, nothing else, he added.

In order to press for a prompt decision, Deuba has held a series of discussions with Oli. In those discussions, the Congress chief is said to have proposed appointing Bhatta, who resigned as the executive director at the central bank.

“Prime Minister Oli is not behind the delay in governor appointment,” said Deuba. Oli has reportedly assured Deuba that the recommendation process will conclude by Thursday.

Before Adhikari retired on April 4, the government had formed a three-member committee led by Finance Minister Bishnu Paudel to recommend the name for a governor. Former Nepal Rastra Bank governor Bijaya Nath Bhattarai and noted economist Bishaw Poudel were members of the committee. Citing the delay in recommending a candidate, Bhattarai resigned from the committee on April 22.

Then the government inducted retired governor Adhikari to the recommendation committee but it has yet to meet and take up the task.

The government’s failure to appoint the governor also figured in Parliament. Opposition leaders including CPN (Maoist Centre) chairman Pushpa Kamal Dahal, Rastriya Swatantra Party Vice-president Swarnim Wagle and others criticised the government for its inability to appoint the governor. As per the set rule and practice, the government recommends the governor a month prior to the incumbent’s retirement.

Deuba also explained why his Congress and Oli’s UML, the largest parties, came together to form a government in a rare parliamentary practice.

"It is difficult for any party to muster a single majority under the current electoral system. Our party is the largest, but we lack a majority. Therefore, it is necessary to form an alliance with another party. Currently, we have an alliance with the UML and Oli ji is the prime minister. He has not created any problems within the alliance. There are no issues in the coalition,” Deuba said.

“The issue regarding the central bank governor is not his doing; it is an internal matter of the central bank. He is in favour of appointing a governor from the Congress party and has not caused any difficulties. In fact, he has been supportive."