KATHMANDU: Prabhu Bank Ltd. has transferred its Chief Business Officer (CBO) Ramesh Kumar Shrestha to Dhangadhi in a move that significantly reduces his responsibilities.

Shrestha, who had been serving in a senior executive role overseeing the bank’s business operations, has reportedly been reassigned to the position of Chief Business Coordination Officer (CBCO), a move widely viewed within banking circles as a demotion.

According to banking sources, the decision follows growing dissatisfaction over Shrestha’s performance, particularly his inability to improve the bank’s loan recovery, especially from large non-performing borrowers. Sources also claim he failed to deliver expected results in managing the bank’s distressed loan portfolio.

Shrestha, a former Chief Executive Officer of Century Capital, joined Prabhu Bank after the merger between Prabhu Bank and Century Bank, where he was appointed as a Chief Manager before being promoted to CBO.

He has previously faced allegations of leaking confidential bank information and conspiring against the bank’s senior leadership during the tenure of former CEO Sushila Karki with the support of her personal assistant Adharsha Shrestha.

Shrestha has also faced regulatory action in the past. While serving as a senior executive at the then Century Bank, Nepal Rastra Bank took action against him and former Deputy CEO Jeevan Kumar Bhattarai over a case involving the alleged misappropriation of US$582,267, citing negligence and bad faith.

As CBO, Shrestha was responsible for business growth and loan recovery, with a particular focus on recovering large defaulted loans. However, insiders say the bank made limited progress in recovering major bad loans under his leadership. Some sources further allege that he maintained unusually close relationships with several large borrowers and engaged in negotiations that raised concerns within the institution. These allegations remain unverified.

Bank insiders also describe the transfer of an Assistant General Manager (AGM)-level executive as highly unusual, claiming Shrestha had become a divisive figure by creating internal factions within the bank.

Employees further claim that under the leadership of the bank’s new Chief Executive Officer, Sharma, Prabhu Bank has yet to achieve significant progress in expanding business, managing large corporate loans, or strengthening loan recovery.

According to multiple employees, Shrestha’s management style and conduct had long been a source of internal concern. They argue that the bank decided to transfer him after concluding that his continued role was no longer in the institution’s best interests and that the move was necessary to protect the bank’s reputation.