Nepal | July 02, 2020

BoK ex-CEO, 10 others arrested

Loans issued against fake collateral

Himalayan News Service
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Kathmandu, September 22

Nepal Police has arrested former chief executive officer of Bank of Kathmandu Ajaya Shrestha and 10 others in a banking offence case worth millions of rupees. While Shrestha was arrested on Friday, others were arrested over a period of two months, but their arrest was made public only today.

The Central Investigation Bureau of Nepal Police arrested five bankers of BoK and six others over BoK issuing loans based on fake collateral and forged documents produced by loan applicants.

“We had received complaints regarding the fraud from BoK almost two months ago. Since then, we have been taking into custody suspected bank officials and valuators of assets while issuing loans,” said Niraj Bahadur Shahi, deputy inspector general of Nepal Police.

In 2015, Surendra Shrestha of Jhapa had acquired loan worth Rs 500 million from BoK. Later, when Shrestha did not pay back the loan the bank initiated an investigation. During the investigation, BoK found that the aforementioned loan amount was issued on the basis of fake land registration document. It was also found that the loan was issued on the basis of fake documents of land situated close to a river in Jhapa.

Consequently, BoK registered a complaint at CIB.

CIB has stated that it can keep suspects involved in banking fraud cases in custody for two months. “We still have to arrest a few more suspects,” said DIG Shahi.

CIB is also preparing to register a case against the suspects at the district court, said Shahi.

A version of this article appears in print on September 23, 2019 of The Himalayan Times.

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