Karnali Development Bank Scandal: Former Chairman Mishra Arrested, Investigation Intensifies

Pashupati Dayal Mishra, the former chairman of Karnali Development Bank, has been arrested in connection with a multi-crore financial irregularity case. He was taken into custody from Nepalgunj, marking a significant breakthrough in the ongoing investigation into the bank’s alleged embezzlement.

Mishra, who rose to political prominence during the Madhesh Movement, had contested the 2017 parliamentary elections from Banke-2 under the CPN-UML’s symbol. He is currently a central committee member of the UML. After being on the run for an extended period, Mishra was under close watch following his suspected involvement in the large-scale banking fraud.

Earlier, the bank’s then chief of finance and founding chairman had already been arrested. A police team is now stationed in Banke district to further pursue the case under the coordination of Nepal Rastra Bank.

The scandal came to light after an internal probe committee, led by the current board chairman, flagged massive financial discrepancies. Based on the findings, Nepal Rastra Bank declared Karnali Development Bank as troubled and took over its management.

According to police sources, misappropriation of approximately NPR 2.5 billion has been reported so far. The investigation is being conducted under the Banking Offense and Punishment Act, 2008.

This case has raised serious concerns about financial oversight and highlights the need for stronger regulatory enforcement within Nepal’s banking sector.