Kathmandu, July 30: A senior official from Nepal Rastra Bank (NRB), deployed to oversee Karnali Bikas Bank, has been found directly involved in a multi-billion-rupee financial fraud, according to a Central Investigation Bureau (CIB) probe.
Investigations reveal that Bhuwan Basnet, then acting director of NRB’s Supervision Department, played a key role in concealing a massive Rs 3.25 billion scam at the bank, whose central office is based in Nepalgunj. Basnet, now retired, allegedly overlooked irregularities in return for personal gains, including a high-end iPhone and a cash payment of Rs 1 million.
The CIB has filed a case against 111 individuals, including Basnet. Among those named is Vikas Bik, a former contract staffer at Karnali Bikas Bank, who testified that he deposited funds into Basnet’s account at the instruction of the bank’s then-CEO Rajendra Bir Raya.
“Raya asked me to deposit cash into Bhuwan Basnet’s Machhapuchchhre Bank account, so I did,” Bik told investigators.
Despite the bank failing to meet the mandatory minimum paid-up capital of Rs 500 million as required by NRB, Basnet falsely reported otherwise. He reportedly endorsed the misrepresentation by allowing the management to mobilize funds under “call-in-advance” accounts, collecting money from founders, shareholders, and interested parties under the pretext of capital compliance. Cash reserves were then misused, but Basnet allegedly turned a blind eye during supervision.
The bank had established a risk management committee as required, but it failed to meet even once from mid-May 2015 (Jestha 1, 2072 BS) until the present, in violation of NRB’s Integrated Directive 6.2, which mandates quarterly meetings. Furthermore, the committee was never restructured, indicating a complete failure in governance.
According to CIB, without holding proper meetings, the board of directors illicitly diverted institutional funds to subscribe to rights shares. The chargesheet also states that the bank failed to clarify the methods and procedures it used to increase its capital, despite clear NRB directives.
Basnet reportedly received multiple payments over time for covering up illegal activities within the bank. Records show he accepted a total of Rs 1,084,250 across six transactions. On February 3, 2019, Vikas Bik deposited Rs 100,000 into Basnet’s account. Just four days later, on February 7, Samjalal Chaudhary deposited Rs 749,250, followed by another Rs 50,000 the next day—both transactions now under scrutiny.
CIB spokesperson SP Yubraj Khadka confirmed these findings and said further investigations are underway to track all individuals and mechanisms involved in the scandal.
People’s News Monitoring Service
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