Kathmandu, February 7

Several plots of land in Lalita Niwas of Baluwatar that were acquired illegally have been pledged as collateral to obtain credit of Rs 2.41 billion from different banks and financial institutions, raising uncertainty about the recovery of these loans.

The report on the Lalita Niwas land-grab case prepared by the Commission for the Investigation of Abuse of Authority shows that loans ranging from Rs 2 million to Rs 1.38 billion were issued using plots located in Baluwatar as collateral.

Even Navin Paudel, son of ruling Nepal Communist Party (NCP) General Secretary Bishnu Paudel, had obtained a loan of Rs 4.9 million from Yeti Development Bank by using land in Baluwatar as collateral.

It is not known whether banks and financial institutions will be able to auction the land if the borrowers default on loan payment.

“We are collecting the exact amount of loans disbursed by banks using land plots in Lalita Niwas as collateral. Bankers will soon sit with the government and Nepal Rastra Bank to seek a way out,” said Bhuvan Dahal, president of Nepal Bankers’ Association.

Meanwhile, officials at the Ministry of Land Management, Cooperative and Poverty Alleviation said BFIs could not auction the concerned plots in Lalita Niwas as the government had already seized those plots. “Banks might take the issue to the court and wait for a verdict. However, they cannot auction the land plots if borrowers fail to clear their loans,” said Janak Raj Joshi, spokesperson for the ministry.

The banks that have provided huge loan using land located in Baluwatar as collateral are Nepal Investment Bank Ltd, Laxmi Bank, Himalayan Bank, NIDC Development Bank and Global IME Bank. Loan disbursed by NIBL using two land plots in Lalita Niwas as collateral has already been cleared, while loan worth more than Rs 1.38 billion issued using four land plots as collateral is yet to be recovered.

Laxmi Bank had issued loan worth more than Rs 320 million accepting two land plots in Lalita Niwas as collateral.

Loan issued by Aarya Tara Saving and Credit and NIDC Development Bank has already been cleared.

The anti-graft body, on Wednesday, filed a corruption case against 175 individuals and organisations, including former deputy prime minister and Nepali Congress Vice-president Bijaya Kumar Gachhadar, former ministers Dambar Shrestha and Chandra Dev Joshi for their role in Lalita Niwas land-grab case. The CIAA has also asked NRB to investigate loans issued by banks using illegally acquired plots in Lalita Niwas as collateral.

Other BFIs which had issued loan using land plots in Lalita Niwas as collateral include IME Finance Institution, Nepal Bank, Unique Finance, Bank of Asia Nepal, Kasthamandap Development Bank, Nepal Development and Employment Promotion Bank, Prime Commercial Bank, KIST Bank and Yeti Development Bank.