The Central Investigation Bureau (CIB) of Nepal Police has completed its investigation into Karnali Development Bank.
The CIB submitted a report of over 1,000 pages to the District Government Attorney's Office in Banke a few days ago after concluding the investigation.
A CIB team had been dispatched from Kathmandu to investigate alleged embezzled at the bank, which has its central office in Nepalgunj. The team has not yet returned.
Senior Superintendent of Police Hobindra Bogati said that the CIB team will return to Kathmandu now that it has completed the investigation.
Based on its investigation, the CIB has concluded that Rs 3.2 billion was embezzled from the bank. It has recommended to the government attorney that the amount be demanded in claims from the accused.
According to a source, some of the funds were brought from other banks and misappropriated without being deposited into the bank. The amount misappropriated in this manner alone exceeds Rs 1 billion, the source added.
Four individuals have been arrested in connection with this case.
Those arrested include the bank’s founding chairman Rajendra Bir Raya, then-chairman Pashupati Dayal Mishra, then-finance chief Bed Prakash Singh Thakuri, and former Nepal Rastra Bank (NRB) supervision officer Bhuwan Basnet.
Mishra is also a leader of the CPN-UML. He served as chairman of the bank from 2009 to 2018.
Raya also has a political background. After 2003, he has been affiliated with all major political parties except the Nepali Congress.
Sources say the CIB has also found evidence against former NRB supervision officer Basnet.
"Evidence shows that a Karnali Bank employee deposited Rs 1 million into his account," a source said. "He had gone for supervision. But evidence of negligence was found when the bank reached a state of collapse.”
NRB staff are also alarmed after the CIB arrested a former employee.
The CIB has concluded that 108 individuals, including them, should be made defendants.
The District Government Attorney's Office is preparing to file charges.
The defendants include three former board chairpersons, eight board officials, four shareholders, three executive officers, 42 employees, 40 debtors, one evaluator, one former NRB employee, and six internal and external auditors.
The CIB has recommended not prosecuting 11 individuals, three of whom have already passed away.
The bank has 100,000 depositors. After being declared troubled, the bank is now being managed by Nepal Rastra Bank.
