Nepal Rastra Bank and Police's Central Investigation Bureau (CIB) began a joint investigation campaign eight months ago which first led to the arrest of Gorkha Development Bank's former president D.B. Bamjan who had siphoned off five million rupees from the bank. Thirteen other members were implicated for misappropriating funds and the Nepal Rastra Bank had issued warrants for their arrests. While most of the culprits have already fled the country, some who have political connections are still in Nepal.
The police also rounded up Rabindrabahadur Singh and Radhakrishna Amatya of United Development Bank in Bara on similar fraud cases and Rastra Bank has scrapped the bank's license.
Six people involved in the misuse of money in Merchant Capital have also been arrested while Pawan Karki, the prime suspect and former board member along with 35 others are hiding from the police.
Nepal Share Market, one of the oldest financial institution in the country is also embroiled in controversy. Its CEO Yogendra Prasad Shrestha was arrested in October for embezzling 2.61 billion. Similarly, officials of Samjhana Finance and Progressive Finance were also arrested while the officials of People Finance are on the run.
CIB's chief DIG Upendrakant Aryal says that even though banking fraud is a serious criminal offence, negligent laws and lack of investigation promote such behaviours in Nepal's banking sector. However, Aryal claims that since the arrest of many bank officials, the number of financial irregularities has decreased.