The board chairman and the CEO of Himalayan Bank are no longer on speaking terms after the bank’s merger with Nepal Investment Bank fell through.

The relationship between Prachanda Bahadur Shrestha, the chairman of the board, and Ashok Rana, the bank CEO, was already shaky, but now the two have stopped talking completely.   

Their animosity has also polluted the boardroom atmosphere. The board members are divided into two factions, one led by Shrestha and the other by Rana. And with the bank’s chairman and the CEO trying to run the bank on their own terms, its performance has taken a hit, reports clickmandu, an financial online news portal. 

The clash of ego has put the entire organization in jeopardy. The seed of dispute was sown after the general meeting held on December 12 rejected the merger proposal with Nepal Investment Bank.

The proposal was turned down when the Employees Provident Fund, also an investor in Himalayan Bank, raised an issue of non-settlement of Asset and Liability Assessment for the merger.

As per the bank merger directive, Nepal Rastra Bank has to be informed if a merger process falls through. But Himalayan Bank is yet to write to the central bank on the last failed merger. The NRB has already summoned the bank, directing it to furnish an explanation.

Ashish Sharma, the bank’s director, who was also a member of Joint Merger Committee, has refused to sign the letter which needs to be sent to the NRB.

Sharma has maintained that he won’t sign unless he does not get a satisfactory response on why the Asset and Liability Assessment conducted by an independent body was rejected.

The NRB could take five different actions against Himalayan Bank for violating the merger agreement: bar it from providing dividend for three years, stop regulatory facility, stop branch extension, and prevent secondary-market share trading.