KATHMANDU, Nov 9: Nepal Bangladesh Bank has resorted to illegal means to appoint two board directors, breaching the norms set by the banking sector regulator, Republica can prove.
The bank, which once triggered a bank run due to financial imprudence, appointed Achut Prasad Bajagain and Mukunda Nath Dhungel as board directors on August 26.
The decision was taken by 208th board meeting of the bank, which was attended by then board chairman Shambhu Saran Prasad Kayastha and two other members, Bishnu Raj Adhikari and Indra Bahadur Thapa.
Although Bangladeshi citizen Mohammad Lutfar Raham was also a board director at that time, he did not attend the meeting as he was said to be in his home country.
Among those who attended the meeting, Kayastha did not sign the minute prepared after election of the duo, although Bajgain later refused the post, documents obtained by Republica show.
Even though the remaining two directors have signed the minute -- endorsing the motion to appoint directors with majority votes -- Adhikari´s ballot cannot be considered legal as he had long ago lost his bank director´s post after being blacklisted as willful loan defaulter.
This generally means the two candidates received only one vote each from director Indra Bahadur Thapa. This is not enough to endorse a proposal as the Bank and Financial Institution Act does not give legitimacy to decisions that failed to attract majority of votes.
Nepal Rastra Bank said if Republica´s finding is true then the appointment of the two cannot be called legitimate. “Since we have already started investigating into the misdeeds of Adhikari following a newspaper report, we will be looking into this matter as well,” a high-ranking NRB official said.
On Tuesday, Republica had published a report on Adhikari, a promoter of NB Bank, who was found working in the capacity of the bank´s board director despite being blacklisted by the Credit Information Bureau.
Adhikari, also the managing director of Kathmandu College of Management, was blacklisted on July 29 for defaulting on an outstanding loan amount of around Rs 70 million acquired in the name of Synergy Property Developer from Nabil Bank.
Although his name no longer appears in the list - because he has since cleared the debt - the Bank and Financial Institution Act does not allow any blacklisted person to assume the post of board director of any bank or financial institution for at least three years from the day the person´s name is withdrawn from the list.
Despite this, Adhikari continued attending the bank´s board meetings in the capacity of director till September 6, documents received by Republica show.