In a letter sent to the board of directors of the BOK, the central bank has warned that it would take stringent action, including dissolving the board, if the clarification failed to justify the action taken by the BOK board against MD Pant.
According to an official of the central bank, the clarification was sought after the central bank was convinced that due processes were not followed in the removal of Pant from the post of MD of the BOK. "We have learnt that the board of the bank neither leveled any charges against Pant nor he was given chances to defend himself," said the official.
The official further said that the process of seeking clarification was initiated after two board members of the BOK had filed complaints before the central bank, urging its intervention as due legal procedures had not been followed by the board of the BOK when they removed MD Pant about a month back.
Justifying the decision to seek clarification, the official of the central bank said that this sort of action was also necessary to discourage a culture in which a majority of the board members imposes its decision, even though the decision may not in the long run be favorable for the bank.
Following Pant´s removal from the post of MD, both those for and against the move have been trading allegations against each other. Supporters of Pant say that Pant was removed due mainly to the differences he had with Sanjaya Bahadur Shah, chairman of the BOK, over the issuing of certain loan proposals.
However, those who support the decision beg to differ. A banker who has been closely watching the developments said that the removal of Pant for decisions made by majority of the broad members itself proves that he had failed to take into full confidence the board members.
He added that the incident shows that Pant was probably not popular with the board, though he had made an important contribution to BOK by making it one of the more successful banks in the country.
Pant had assumed the post of MD some seven years ago. During his tenure, the non-performing loans of the bank decreased to 2.28 percent, from over 10 percent, and deposits went up to over Rs 13 billion.
The executive board of the BOK has Shah as Chairman, and Pant, Sitaram Thapaliya, Rita Malla, Balaram Neupane, Sudarshan Raj Paudel and Shanta Bir Singh Thapa as members.
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