The suspicion was raised a day after the bank revealed involvement of one of its branch managers in fraudulent acts, which is likely to wipe away millions of rupees from the financial institution.[break]
“There are chances the manager may have illegally removed money from accounts of depositors as well,” Jasoda Sainju, CEO of the bank, told Republica. “We have asked all accountholders of our Kuleshwar branch to come to the head office in Kamaladi and provide us updates on their deposits.”
The bank on Thursday said Niraj Nepal, manager of Kuleshwor branch office, colluded with few individuals to issue fake good for payment checks, based on which millions of rupees were withdrawn from different financial institutions.
Nepal, who is currently in police custody, however, has not revealed anything significant.
“We have been interrogating him but he has only said he plotted the fraud scheme with Manoj Chaurasia and Jay Kumar Yadav. We have also asked officials of Nepal Rastra Bank (NRB), the banking sector regulator, to help us in the investigation,” DSP Dhirendra Pratap Singh, spokesperson for the Metropolitan Police Range Kathmandu, told Republica.
The bank came to know about Nepal´s offence after it started detecting shortage of considerable amount in its vault. As it tried to track the lost amount, it detected huge withdrawals on the back of fake good for payment checks.
Banks issue good for payment checks against the cash parked by depositors in their accounts. The benefit of holding such checks is that it can be converted into cash from any financial institution. However, such checks are cleared only after getting a confirmation from the institution that issued the check. And this is where Nepal is suspected to have abused his authority of branch manager.
“Instead of ringing alarm bell, Nepal probably extended green signal to those institutions to convert the fake checks into cash, despite knowing the depositor did not have enough cash in the account to cover the payment. Later, he must have released the amount from the bank to repay those institutions that had cashed the fake checks,” a source at NRB said.
Now the bank is suspecting Nepal may have also misappropriated money from accounts of depositors.
“He may have removed the money from accounts and manipulated the system to show the withdrawals were made by depositors themselves who have accounts in the bank,” Sainju said. “That´s why we are contacting every accountholder of Kuleshwar branch to confirm whether their cash is intact in their accounts.”
She, however, said nothing can be confirmed as of now as investigation is still going on.
NRB Spokesperson Bhaskar Mani Gyawali, meanwhile, said depositors need not worry about losing money as “the liquidity position of the bank is strong.”
´Use of good for payment checks as collateral illegal´
Nepal Rastra Bank (NRB) has launched an investigation into illegal practice of pledging good for payment checks as collateral to obtain loans from different banks and financial institutions.
The practice of pledging such checks as security came to light during the course of investigating financial misappropriation at H&B Development Bank, which is likely to lose millions of rupees due to issuance of fake good for payment checks.
“The purpose of issuing good for payment checks is not to use it as security against loans. This is completely illegal and we will take action against those who are involved in such activities,” NRB Spokesperson Bhaskar Mani Gyawali said.
He also informed bearers of such check issued by H&B may have to wait until completion of the investigation to receive payment. “They won´t lose money and their checks will eventually be converted into cash,” he said.
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