KATHMANDU, Aug 7: The Nepalgunj bench of the Tulsipur High Court has ordered the pretrial detention of three individuals involved in the embezzlement case related to Karnali Development Bank. The bench comprising Justices Chandra Bahadur Saru and Poonam Singh issued the order in connection with a major financial fraud of Rs 3.20 billion at the bank, which has its head office in Nepalgunj.
The court has sent former chairman of Karnali Development Bank, Pashupati Dayal Mishra, Rajendra Bir Rai and head of the finance department, Ved Prakash Singh Thakuri, to judicial custody, stating that they cannot be released on bail or on a date. However, the court ordered the release of another accused, former Nepal Rastra Bank employee Bhuvan Basnet, on bail of Rs 200,000.
CIB reports embezzlement worth Rs 3.2 billion in KDBL scam
According to the court's findings, Rai, Mishra and Thakuri were involved in the embezzlement of funds deposited from other banks into Karnali Development Bank, manipulating inter-branch transactions, remittance services, gold loans, and issuing fake loans. The misappropriation also extended to the handling of rights shares transactions.
The Central Investigation Bureau (CIB) had filed the case naming 109 individuals as defendants in the fraud. Among them, two have already died and 103 remain absconding. After the statement recordings of the four arrested individuals were completed on July 31, the case has been under continuous hearing since August 1.
The financial damage and penalty claims in the case include Rs 2.63 billion against Rai, Rs 820 million against Mishra, over Rs 100 million against Basnet and more than Rs 240 million against Thakuri. The CIB investigation had uncovered evidence that Rs 1 million from Karnali Development Bank had been deposited into Basnet’s account during his tenure as a Nepal Rastra Bank inspector.
On 25 December 2024, Nepal Rastra Bank had declared Karnali Development Bank problematic and appointed a three-member management committee under the coordination of Deputy Director Tika Ram Khatiwada to oversee the bank’s operations. Karnali Development Bank was established in 2009.
