BoK calls back MD, to hire professional CEO

Radhesh Pant, managing director, Bank of Kathmandu (BoK), has been ‘called back’ from the post of managing director by the majority of the Board of Director, yesterday.
Sanjay Bahadur Shah, chairman of the Board, dubbed the action as a strategic initiative of the bank while looking into the future. Significantly, it has a bearing on the global economic meltdown and its impact on the nation's banking sector.
"I was taken aback by the move," a surprised Pant said.
A source, close to him, maintained that he was asked to step down last week. "He, however, turned down the proposal. He insisted that he did nothing wrong to warrant such a move," added the source.
In the latest realignment of head honchos, BoK has elevated Sabin Raj Shrestha as officiating Chief Executive Officer (CEO). Earlier, he was Chief Business Officer.
"We have formed a sub-committee to recommend an independent professional CEO at the earliest," added the chairman. He elaborated on the unprecedented move.
A majority of BoK's shares are with the public. Only 42 per cent is with the promoters, making it the only private bank in the country, which has 58 per cent public shareholders.
According to Shah, the Board felt that a professional CEO – instead of a promoter -- would be best primed for chalking out future initiatives and strategies. This will be devoid of "any promoter, investor or owner group bias".
"However, Pant -- who has 10 per cent shares -- will continue as a director in the Board. The decision has nothing to do with his perceived non-performance," added Shah.
Pant served as the MD for seven years in BoK. He turned around the financial institution into a profitable venture. At present, its shares are trading at Rs 1400. It was Rs 200 when he assumed charge.
"In retrospect, he was apt in light of the bank's financial health. He did a commendable job. But, times have changed. Hence, the Board feels an independent professional CEO is better suited for the top job," reasoned Shah.
The 313th Board meeting yesterday took the decision by majority to ‘call back’ Pant from the post of MD and scrapped the post as well . Four directors, two each from promoters and public, upheld the decision. The remaining duo did not oppose the move. There are only seven members -- including Pant -- in the Board at present after one public director resigned.

Fifth governor Dr Pant passes away

Dr Yadav Prasad Pant, former finance minister, renowned economist and fifth governor of Nepal Rastra Bank (NRB) passed away in Bangkok on November 14, Wednesday at the age of 82. He was undergoing treatment at Bumrungrad Hospital in Thailand.
Dr Pant is the first Nepali to be awarded the Doctorate in Economics in 1952 and the Doctorate in Literature in Economics in 1976. He has held several positions in different national and international organisations including senior economist at the UN ESCAP (Bangkok), finance and planning secretary, senior member of the National Planning Commission, governor of the Nepal Rastra Bank Bank, Royal Nepalese ambassador to Japan, chairman of the Economic Commission and the minister for Industry, Commerce and Supplies, Finance and Water resources.
He also served as the chairman of several government-owned corporations, including Nepal Industrial Development Corporation (NIDC), National Trading Ltd, Royal Nepal Airlines Corporation and Nepal Oil Corporation.
He was the visiting professor in a number of institutes like UN Institute Bangkok, Institute of International Studies, Tokyo and Korean Development Institute, Seoul.
He served as the vice-president World Federation of United Nation Association in 1991-1999. Dr Pant was district governor of Lions Clubs International, District 325 – B. He was also Excom member of the world Federation of the United Nation Association, Geneva, Founder president of both the Nepal-Japan Friendship and Cultural Association, and Nepal – Scandinavian Chamber of Commerce and Industry.
Avid reader Dr Pant was the author of more than two dozen books including 'Problems in Fiscal and Monetary Policy', 'Trade and Co-operation in South Asia' and 'Some aspect of Economical Planning' and has contributed many articles to various national and international journals.
Dr Pant was the president of Society for International Development, vice-president of Nepal Red Cross Society and also served as Charter president, Lions club of Nawalparasi and served as Zone chairman and vice-district governor of Lions club International District 325 – B, in 1999-2000 and governor in 2000-2001.
He was decorated with the highest decorations by the government Nepal and Her Majesty Queen Elizabeth, Emperor of Japan and president of Republic of Korea.
He is survived by his wife Rama Devi Pant and three sons Dr Girish Pant, Dr Bhuwanesh Pant and Radhesh Pant (managing director of Bank of Kathmandu and president of Nepal Bankers' Association) and a daughter Meera Arjyal.

21st commercial bank comes into operation

Finance Minister Dr Ram Sharan Mahat inaugurated Prime Commercial Bank Ltd, the 21st commercial bank in the capital on 28 September.
“Banks should extend their services to rural areas,” Mahat said adding that in proportion to increasing number of banks, the economy is not expanded and only finance sector is attracting more investment currently. “If it continues, it may not be sustained,” he said.
Speaking on the occasion, Krishna Bahadur Manandhar, acting governor of the Nepal Rastra Bank (NRB) said thatnew banks are coming as per government’s policy.Given the size of economy and the low gross domestic production (GDP), experts claim that the banks are overcrowded.
“But in the open market policy they cannot be stopped,” Manandhar said adding that those who cannot compete in the free market will close down.Prime Commercial bank has more than 359 promoters from different walks of life.Its authorised capital is Rs 1.5 billion, issue capital one billion rupees and paid up capital is700 million. It has the largest paid up capital among the commercial banks.
Narayan Das Manandhar, a seasoned banker and chief executive officer (CEO) of the bank said that Prime bank is the first bank which has largest paid up capital.
“We are bringing some more innovative banking products and services to offer to our clients soon,” he said announcing the starting of its services of ATMs, Internet banking, SMS banking and evening counter from today.
Narendra Bajracharya, chairman of the bank, on the occasion said that Prime is committed to prudential banking norms, financial transparency and good corporate governance.
“We are planning to invest on hydro, agro, infrastructure, road, communication-based industries,” Bajracharya said adding that it will bring some new packages for the SMEs also.
“Due to lack of opportunity for big investment, Nepali banks are concentrating on retail lending only,” Radhesh Pant, managing director of Bank of Kathmandu and president of Nepal Bankers’ Association said adding that after 2010, foreign banks will come to Nepal and local banks have to compete with them.
“Thus local banks should build competitiveness in skilled manpower, modern technology and they should be efficient in management,” he added.
The banks that have professional management team have registered tremendous growth. Thus professional management of banks is a key to compete with the foreign banks.