Bank of Maharashtra CMD Muhnot fired

Marathe new MD and CEO of Bank

The government on Monday sacked chairman and managing director (CMD) of Bank of Maharashtra Sushil Muhnot with immediate effect, just four days ahead of his retirement.

Bank of India executive director Ravindra Prabhakar Marathe has been appointed MD and CEO of Bank of Maharashtra. Marathe took charge and said his priority would be to take employees and customers along to improve financials of the bank.

This was a rare step taken by the government as Muhnot was to retire on September 30. The decisions were announced through two notifications issued by the department of financial services. However, the notifications did not give reasons for Muhnot’s removal.

Earlier this year, the finance ministry had served a show-cause notice to Muhnot, asking him to explain why he should not be terminated for allegedly occupying two houses, according to sources.

He had allegedly occupied two houses — one in Mumbai and another in Pune, the bank headquarters. The finance ministry took up the issue following a complaint. Occupying two houses is a violation of the service conditions. Marathe said he will give priority to improve profitability of the bank by controlling asset quality, among other steps. “I am aware of the challenges that public sector banks are facing,” he said.

Earlier, too, some state-owned bank chiefs have been issued show-cause notices. A decade ago, Punjab & Sind Bank CMD N S Gujral was asked to go on leave. In recent history, Syndicate Bank chief S K Jain was removed from his post after a CBI case on charges of corruption. In the state-owned insurance sector, Life Insurance Corporation Chief S K Roy was replaced by V K Sharma.

However, it was said that Roy was removed on his request to be relieved of his duty because of personal reasons.

The finance ministry is reported to be conducting a departmental enquiry against Roy, allegedly over investments made by LIC in real estate firm Unitech in 2008-09.

Disclosure: The piece has been modified to correct errors made inadvertently.