Kathmandu- Ashok Sherchan, CEO of Prabhu Bank, has received a major relief after the Supreme Court (SC)  issued an interim order overturning the Patan High Court’s earlier decision that had ended his tenure.

The order, issued by a single bench of Justice Til Prasad Shrestha, includes a show-cause notice and effectively allows Sherchan to remain in his post. The Patan High Court had ruled that Sherchan’s term ended on April 22, but the SC's intervention has now ensured his continuation.

Sherchan, who had already completed two terms as CEO, was reappointed for a third term after Prabhu Bank’s merger with Century Bank. The board appointed him for four years starting January 26, 2023, meaning he is set to serve until January 25, 2027.

As per the Bank and Financial Institutions Act 2017 (BAFIA), which came into effect on April 23, 2017, the CEO’s tenure is capped at eight years. However, Section 29(2) of the Act clarifies that the term should be counted only from the law’s enactment. Based on this, Sherchan’s first term began in 2018 and his second in 2023.

The SC’s stance supports this interpretation, reinforcing his current appointment. The ruling may also set a precedent that protects the tenures of other CEOs, including Nepal Investment Mega Bank’s Jyoti Prakash Pandey and Himalayan Bank’s Ashok Rana.