Karnali Development Bank Chairperson Arrested for Financial Embezzlement



Kathmandu — Rajendra Bir Raya, Chairman and Chief Executive Officer of Karnali Development Bank, has been arrested on charges of embezzling over NPR 2.5 billion.

The Central Investigation Bureau (CIB) of Nepal Police arrested Raya from Rupandehi on Saturday. Originally from Salyan, he had been residing in Banke. Raya served multiple terms as the Chairperson and CEO of Karnali Development Bank.

Earlier, in Poush 2081, Nepal Rastra Bank took control of Karnali Development Bank, declaring it a crisis-ridden institution. A three-member team was deployed to oversee the bank’s management.

The management committee was led by Tikaram Khatiwada, Deputy Director of the Financial Institution Regulation Department. Other members included Bishnu Kumar Bishwakarma, Deputy Director of the Financial Institution Supervision Department, and Jugalkishor Kushwaha, Deputy Director of the Legal Division.

The team found that the bank’s previously published financial statements were all incorrect.

As part of the due diligence audit (DDA) conducted by the team appointed by Nepal Rastra Bank, the report identified several irregularities, including fund embezzlement, misuse of the mandatory cash reserve ratio (CRR), remittance fraud, loan misappropriation, cheque misuse, issuance of loans based on false documents, and suspicious transactions related to money laundering.

According to the report, the bank’s liabilities exceed its total assets. It further states that the bank would not be able to meet its obligations even by selling all of its assets. The bank currently has only NPR 2.56 billion in capital and assets, while it faces outstanding liabilities of NPR 5.03 billion. Of this, NPR 2.46 billion in liabilities cannot be covered by the bank’s own assets.

Chairperson Raya is currently in CIB custody, and further investigations are underway.


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