KATHMANDU, April 16: The Supreme Court (SC) has issued an interim order in favor of Ashok Sherchan, Chief Executive Officer (CEO) of Prabhu Bank, allowing him to continue in his position until a final verdict is reached on a tenure-related dispute.
Sherchan had filed a writ petition against the interpretation made by the Patan High Court regarding the term limit for bank CEOs. A single bench of Justice Til Prasad Shrestha issued the interim order after hearing the petition, which named Nepal Rastra Bank (NRB) and the Patan High Court as defendants.
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Earlier, the Patan High Court had dismissed a writ that challenged Sherchan's reappointment, ruling that the CEO’s tenure should be counted from the date the Banks and Financial Institutions Act (BAFIA) came into effect on April 23, 2017. The court interpreted that Sherchan could serve as CEO until April 21, 2025, based on the eight-year limit stipulated in the Act. However, it did not clarify his status beyond that date, creating confusion about his continued eligibility.
Sherchan, who was reappointed in January 2023 for a four-year term, had argued that his previous tenures before BAFIA's implementation should not be counted under the new Act. The interim order from the SC ensures that he remains in office while the case is under consideration.
This decision is expected to provide temporary relief not only to Sherchan but also to over a dozen CEOs of banks and microfinance institutions who face similar tenure-related uncertainties.
The SC also issued a show-cause notice to the defendants, asking them to clarify their positions regarding the case.
