In an unprecedented move, the Centre on Monday sacked Sushil Muhnot, chairman and managing director of Pune-based Bank of Maharashtra, four days short of his scheduled retirement, and appointed Ravindra Marathe as the state-owned lender’s new chief.
Mr. Muhnot was appointed as the chairman of the bank in November 2013, and was scheduled to retire on September 30.
“In exercise of the powers conferred by sub-clause (4) of clause 8 of the Nationalised Banks (Management and Miscellaneous Provisions) scheme 1970/1980, the Central government hereby removes Shri Sushil Muhnot from the post of chairman and managing director of Bank of Maharashtra with immediate effect,” the government order said.
However, the government did not cite any reason for its action.
Earlier this year, the finance ministry is reported to have served a show-cause notice to Mr. Muhnot asking him to explain why he should not be terminated from service for an allegedly occupying two houses.
Mr. Muhnot told The Hindu he was yet to take a decision on his future course of action.
“Let’s see. Nothing as yet,” he said, when asked if he planned to file a legal challenge.
The new chief executive officer Mr. Marathe, who was an executive director with Bank of India, took charge on Monday.
Mr. Marathe has been given a term of a little more than two years at Bank of Maharashtra, with his appointment set to run till November 30, 2018, when he is scheduled to retire after attaining the age of 60.
Like many other public sector banks, the Pune-based lender is also reeling under the pressure of non-performing assets.
It reported a loss of Rs.397.4 crore in the first quarter ended June 30 on account of bad loans.
Gross non-performing assets (NPAs) or bad loans rose to 12.6 per cent of gross advances as of June 2016, from 7.86 per cent a year earlier.
The government holds 81.6 per cent stake in the lender.
In September 2014, the government had terminated the services of S.K. Jain, the then chairman and managing director of Manipal-based public sector lender, Syndicate Bank after he was arrested by the Central Bureau of Investigation over graft charges.
Source: The Hindu