Massive Embezzlement of Over Rs. 3.38 Billion Uncovered at Karnali Development Bank

A shocking case of financial fraud has surfaced at Karnali Development Bank, with the Central Investigation Bureau (CIB) revealing that more than Rs. 3.38 billion in cash has been embezzled through systematic internal manipulation.

According to the CIB investigation, large amounts of cash brought in from other banks were not recorded in the system and were directly misappropriated. Transactions involving checks and vouchers revealed the involvement of 17 individuals, leading to the embezzlement of Rs. 1.11 billion.

Furthermore, Rs. 153 million was listed as being transferred to other banks but was never deposited. An additional Rs. 17.8 million was embezzled through remittance operations by transferring funds into personal accounts.

Fraud Under Loan, Salary, Insurance, and Rights Share Pretexts

Rs. 44.3 million was misused under the pretext of issuing gold loans, while Rs. 900,000 was siphoned off in the name of salary increments. Similarly, Rs. 19.6 million was misused for insurance policies under employee and shareholder names, and Rs. 58.5 million was embezzled by issuing rights shares to board members and founders.

Violation of NRB Ban, Deposits Still Collected

Even after Nepal Rastra Bank (NRB) prohibited new deposits and lending on Mangsir 11, 2081 BS, the bank continued collecting deposits, embezzling Rs. 145.9 million during this period.

Fake Companies, Loans, and Land Transfers for Fraud

Employees created fake companies under relatives’ names, issued loans to these entities, and embezzled Rs. 1.79 billion. The misused funds were then used to buy real estate, which was registered under close associates and mortgaged back to the bank at inflated valuations to extract additional loans.

The investigation shows deep-rooted internal collusion at multiple levels within the bank. The CIB has confirmed that legal actions are being prepared against those involved in this massive financial fraud.