Kathmandu – The Central Investigation Bureau (CIB) has launched an investigation into Karnali Development Bank following allegations of misappropriation and loan fraud exceeding NPR 1 billion. Nepal Rastra Bank (NRB) took over the bank on Poush 10 (December 25) after discovering systematic financial irregularities by its board of directors and management.

Growing Scale of Financial Misconduct

Initially, investigators identified financial misappropriation of NPR 1.26 billion. However, ongoing probes suggest the total amount may be even higher. NRB’s investigative team is expected to release a detailed report on the extent of the fraud within this week.

Following the takeover, NRB deployed a field investigation team led by Tika Ram Khatri, Deputy Director of the Bank and Financial Institutions Regulation Department. The team includes Vishnu Kumar Bishwakarma from the Financial Institutions Supervision Department and Jugal Kishore Kushwaha from the Legal Division.

Over the past two months, the team found that the bank’s liabilities amounted to NPR 4.6 billion, while its total assets stood at approximately NPR 3.8 billion. Additionally, NRB’s management team has successfully refunded more than NPR 220 million in deposits to customers.

CIB’s Manhunt for Fugitives

After completing its preliminary investigation, NRB sought assistance from the Central Investigation Bureau (CIB). Following an official request, CIB has joined the probe and is assisting the central bank’s management team.

Speaking to Banking News, CIB spokesperson Sudhir Raj Shahi stated, “Our team is actively supporting NRB’s investigation. Once we finalize the findings, legal proceedings will follow.”

According to Shahi, before NRB’s takeover, seven key officials—including the bank’s chairman, CEO, and former executive officers—switched off their mobile phones and went into hiding. Despite CIB’s involvement, the fugitives remain out of contact.

Investigators suspect the list of individuals involved in the scandal could grow, as evidence suggests misconduct such as fund embezzlement, issuing loans against weak collateral, and even approving loans without collateral. A detailed report on these findings is expected within the week, after which further legal actions will be initiated.