Police in Nepal have arrested three people, including the former CEO of Karnali Development Bank, in connection with a banking scandal. The arrests were made on Friday in Nepalgunj, where the bank is based.
Former CEO Neeraj Bikram Shah, his wife Shubhechchha Shrestha, and Deepa Thapa, the bank’s former branch manager in Nepalgunj, were taken into custody, according to police. The three were wanted in connection with banking offenses and financial irregularities.
The police said that an investigation had been launched into the bank’s activities, which included the approval of large loans without following internal procedures, and the use of fake or weak collateral to secure loans. The investigation also found serious errors in the valuation of collateral and the management of documents.
The case was filed at the High Court in Tulsipur, Nepalgunj, after an investigation by the Central Investigation Bureau (CIB) of the Nepal Police. The court has accused 109 people, including the bank’s founder chairman Rajendra Veer Rai, former chairman Pushpadayal Mishra, and former finance chief Bed Prakash Singh Thakuri, of involvement in the scandal.
The Nepal Rastra Bank, the country’s central bank, had taken control of Karnali Development Bank’s management on December 25 after the bank’s financial condition deteriorated. The incident has raised questions about the effectiveness of internal controls, risk management, and regulatory oversight in the banking sector.
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