Prabhu Bank CEO Resignation Approved by Board
3rd February 2026, Kathmandu
The board of directors of Prabhu Bank Limited has formally approved the resignation of its long standing Chief Executive Officer (CEO), Ashok Sherchan. The decision, finalized during a board meeting on Magh 19, 2082 (February 1, 2026), marks a pivotal shift for one of Nepal’s largest commercial banks.
Prabhu Bank CEO Resignation
While the bank’s official statement frames the departure as a procedural transition, the resignation follows a period of intense legal and regulatory scrutiny involving high level investigations into the bank’s internal management.
Leadership Crisis and the Path to Resignation
The resignation of Ashok Sherchan is the culmination of a series of events that began in late 2025. In Mangsir 2082 (November 2024), Sherchan, along with other senior executives, was detained by the Central Investigation Bureau (CIB) of Nepal Police. The investigation centered on allegations of banking offenses, including the misappropriation of funds and the unauthorized disbursement of loans totaling nearly 980 million rupees.
Key factors leading to the leadership change included:
Judicial Rulings: The Patan High Court had previously issued a ruling capping Sherchan’s tenure at Baisakh 9, 2082, citing violations of the Bank and Financial Institution Act (BAFIA), which limits a CEO to two four year terms.
Regulatory Pressure: Nepal Rastra Bank (NRB) and the CIB intensified their oversight following complaints of financial misconduct and unauthorized access to banking systems by third party consultants.
Internal Stability: The board sought to mitigate reputational risk and ensure the bank’s operational health amidst the ongoing investigation.
Appointment of Neeraj Lamsal as Acting CEO
To ensure that the bank continues its daily operations without interruption, the board has appointed Neeraj Lamsal as the Acting Chief Executive Officer. Lamsal, who previously served as the Assistant General Manager and head of the loan recovery department, has been effectively leading the bank in an interim capacity since Mangsir 14, 2082.
Lamsal’s background is rooted in risk management and credit recovery, making him a strategic choice to guide the bank through its current recovery phase. His primary mandates include:
Restoring Investor Confidence: Stabilizing the bank’s stock performance on the Nepal Stock Exchange (NEPSE).
Regulatory Compliance: Cooperating with NRB and the CIB to resolve the outstanding legal investigations.
Operational Continuity: Overseeing the bank’s vast network of over 300 branches and ensuring seamless service delivery to millions of customers.
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Institutional Performance and Shareholder Impact
Despite the leadership turmoil, Prabhu Bank has maintained its position as a major player in the Nepalese banking sector. For the fiscal year 2081 2082, the bank reported significant growth in its deposit base and total assets, although it recently announced a decision not to distribute dividends to prioritize capital conservation and meet regulatory capital adequacy ratios.
Financial Snapshot (as of early 2082):
Total Assets: Among the top five commercial banks in Nepal.
Network: Over 300 branches and 70 extension counters nationwide.
Stock Performance: The bank’s share price has remained resilient, trading near the industry average despite the news of the CIB investigation.
The board has emphasized that the transition to new leadership is part of a broader “Governance Reform” strategy intended to modernize the bank’s internal controls and prevent the recurrence of the issues seen under the previous administration.
Future Outlook and Selection of Permanent CEO
Following the acceptance of the resignation, the board of directors, led by Chairman Kishor Jung Karki, is expected to begin a formal search for a permanent CEO. This process will involve:
Shortlisting Candidates: Evaluating both internal veterans and external banking experts with a strong track record in corporate governance.
Fit and Proper Test: Submitting the selected candidate’s profile to Nepal Rastra Bank for a mandatory “Fit and Proper” evaluation as per NRB directives.
Strategic Realignment: The new CEO will likely focus on digital transformation and aggressive loan recovery to strengthen the bank’s balance sheet.
Conclusion
The Prabhu Bank CEO Resignation marks the end of an era defined by rapid expansion and recent legal challenges. With Neeraj Lamsal at the helm as Acting CEO, the bank is prioritizing stability and transparency. While the shadows of the CIB investigation remain, the formal board approval of the resignation signals a clear intent to move forward. For customers and investors, the bank’s focus remains on maintaining its status as a leading financial institution through disciplined management and regulatory adherence.
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