KATHMANDU, April 26: Controversial medical entrepreneur and political activist Durga Prasai, known for his provocative campaigns urging the public not to repay loans, is himself under scrutiny for failing to repay bank loans exceeding Rs 7 billion. The Central Investigation Bureau (CIB) of Nepal Police has launched an investigation into potential loan misuse and money laundering connected to Prasai’s business ventures.
According to banking sources, three major projects under Prasai’s leadership have defaulted on loans taken from eight financial institutions, including six commercial banks, one development bank, and one finance company. These loans have reportedly remained non-performing for over two years.
Among the projects in question are the B&C Medical College, the Eastern Cancer Hospital, and an under-construction hotel in Jhapa district. Prasai’s businesses obtained substantial credit from banks such as Kumari Bank, Global IME, Prabhu Bank, and Nepal Investment Mega Bank, among others. Most of these loans have not seen regular repayments since 2022.
High Court dismisses Durga Prasai's petition against repaying b...
Prasai was earlier affiliated with the CPN-UML and was appointed as a central committee member during the Chitwan General Convention. However, in recent months, he became the face of a movement demanding the reinstatement of monarchy and Hindu statehood, during which he also aggressively criticized financial institutions.
Authorities suspect that Prasai strategically used these political platforms to deflect attention from his financial troubles. He had reportedly sent threats via calls and messages-some allegedly invoking the name of Indian gangster Lawrence Bishnoi-to bank officials and even top-level figures at Nepal Rastra Bank when pressed for repayment.
The investigation has revealed that his companies had signed loan agreements with various banks, particularly for the development of the Eastern Cancer Hospital. In FY 2020/21, the banks disbursed approximately Rs 1.75 billion as per the agreement, with conditions that repayments would begin within two years of disbursement or six months after project completion, whichever came first.
However, repayment deadlines have long passed, and Prasai has neither settled the principal amounts nor the interest. The banks had also agreed to provide an additional Rs 300 million for purchasing medical equipment, but Prasai claimed this loan was never issued. Citing breach of agreement, he filed a writ petition at the High Court against the consortium of banks involved in issuing the loan, including Kumari Bank.
The CIB’s ongoing investigation aims to uncover whether Prasai intentionally misused borrowed funds and if there are links to broader financial irregularities, sources revealed. The situation has drawn public attention not just for the sheer volume of debt, but also for the irony of Prasai’s anti-bank rhetoric while defaulting on billions in loans.
Prasai was reportedly arrested in Assam state of India recently, where he had fled following a violent pro-monarchy protest in Kathmandu organized under his leadership. He remains in police custody as the investigation continues.
