Banking fraud in Nepal has seen a significant rise in recent years, with over 13,000 cases registered in the 2023/24 fiscal year, often involving collusion between bank staff and borrowers. While top-tier commercial banks generally have stronger systems, several have been implicated in high-profile loan misuses, collateral overvaluation, and insider embezzlement scandals.

Kathmandu, The involvement of employees in cases of embezzlement and fraud in the banking sector has begun to be seen. Recent investigations have revealed that high-level officials have been involved in the misuse of bank funds.

The issue of bank employees embezzling bank money is certainly not new. It has been found that bank employees are involved in various scam cases from commercial banks to development banks. Various government reports have also shown that bank employees are more involved in banking-related crimes. A study by the Central Investigation Bureau (CIB) of the police has also shown that bank employees play a direct or indirect role in most banking crimes.

According to CIB data, 50 bank employees and 10 directors were involved in 20 major banking crime cases from the fiscal year 2074/75 to 2080. A total of 104 people were arrested in such cases, more than half of whom were bank employees. This CIB data also confirms that there are many employees who misuse their positions in the organizations they work for.

Rs 50 million Fraud case in Citizens Bank

During the initial investigation, the police had found that a scam of about Rs 49.1 million had taken place at the Citizens Bank branch in Kanchanbari, Biratnagar. The police had taken the incident seriously from the day the complaint was received and had collected the necessary documents from the bank on the same day.

The involvement of the bank's own employees in the embezzlement case has further complicated the incident. Initial investigations have revealed that the main role of operations in-charge Rosie Kandel, who had full authority to operate the bank's branch, was revealed. Kandel misused her authority and position to fake transactions by showing non-existent transactions, said Narayan Raj Adhikari, the bank's information officer. According to him, the bank had given most of the authority related to the operation of the branch to Rosie and that authority was misused.

The involvement of the bank's own employees in the embezzlement case has taken a further turn in the incident. Initial investigations have revealed that the main role of Operations In-charge Rosie Kandel, who had full authority to operate the bank's branch, was revealed. Kandel misused her authority and position to fake transactions by showing non-existent transactions, said Narayan Raj Adhikari, the bank's information officer. According to him, the bank had given most of the authority related to the operation of the branch to Rosie and that authority was misused.

After the accounts did not match during the bank's audit, the bank tried to resolve the matter internally by returning the money. However, when the amount was not returned within the time given by the bank, the bank filed a complaint with the police. According to Adhikari, the bank's information officer, he has also been dismissed from his job. The Biratnagar High Court has issued an arrest warrant for Kandel, the main planner of the scam case.

Not only Citizens Bank, but also other banks have become vigilant due to the situation of having to bear such a huge loss from an employee to whom the bank had given full authority. Banking experts say that trust in employees will be weakened after a large amount of money is embezzled by one of their own employees in a sensitive sector like banking.

Rs 28.4 million Fraud case in Mahalaxmi Bikas Bank
In the last Shrawan, it was revealed that an employee of Mahalaxmi Bikas Bank had embezzled Rs 28.4 million kept in the bank's vault. The amount kept in the vault of the branch in Darchula was found to have been embezzled. Four employees of the Mahalaxmi Bikas Bank branch in Shailyashikhar Municipality-9, Darchula, were arrested on charges of embezzling a large amount of money. Based on the bank's complaint, the police arrested branch manager Sagar Shahi, Nirmala Saud, Dhananjay Pant and Ambadatta Pant.

The bank's initial investigation revealed that the employees had invested the bank's money in the online gambling platform 'One X Bet', which is banned in Nepal. The bank had also suspended them after it was found that the money was embezzled in collusion with all four of them. It was found that they had embezzled the money illegally by showing the vault balance in the bank's main account. The police arrested them for banking offences after it was confirmed that they had misappropriated the bank's funds through illegal gambling.

Not only this, three branch managers and former managers of Mahalaxmi Bikas Bank were also arrested in 2077 BS in a banking offence case. The Central Investigation Bureau of the police arrested the managers and former managers of various branches of the bank. Those arrested were the then branch manager Smriti Rana, branch manager Pinku Palikhe and branch manager Anish Singh Sinjapati. It was revealed that they had colluded with the borrowers to overvalue underweight gold ornaments and taken more loans and had not paid the principal and interest till now. This had caused a loss of 74.261 million rupees to the bank.

Two scam cases in  Nepal Bank

The Commission for the Investigation of Abuse of Authority had filed a corruption case against the then chairman of the government-owned Nepal Bank, Dr. Chandra Bahadur Adhikari. According to the CIAA, he had taken a bribe of Rs 1.9 million in cash from Nepal Bank on the pretext of facilitating a loan of Rs 1.77 billion 29 million 86 thousand 766 from Bhusal Hospitality under Bhusal Hospitality in Siddharthanagar-1, Belhiya, Rupandehi. The Commission had filed a charge sheet in the special court on June 26.

A case was filed against five people, including the officer, in the same case. These included Khush Naseeb Ansari (Lucky), Amrit Bhusal, Ankit Bhusal and Bal Krishna Bhusal. Not only this, in 2077 BS, the CIAA had filed a case in the special court against the then branch manager of Nepal Bank's Dillibazaar branch, Bhupraj Koirala, on charges of corruption of Rs 5.484 million 45. The CIAA's charge sheet stated that Koirala transferred the amount to his account using the bank's teller ID and system super user. The CIAA had requested the special court to pay the amount of Rs 5.484 million 45 and 60 paisa, saying that he had committed an offense of corruption.

Rs 40 million scam case in Krishi Bikas Bank

Another government-owned Krishi Bikas Bank employee also embezzled more than Rs 40 million. In 2074 BS, employees of the bank's New Road branch embezzled more than Rs 49.1 million. Investigation revealed that the embezzlement of the amount was carried out with the involvement of the branch manager, who had full responsibility for the branch. A case was filed against the bank's New Road branch branch chief Gopal Giri, head of the credit department Maheshwar Marhattha, assistant tellers Deepika Regmi, Ramesh Bista, branch managers Premhari Dhungel, Salil Regmi, Taranath Pandey and Prakash Ghatani on charges of embezzlement.

The special court had sentenced teller Deepika Regmi to 8 years in prison and imposed a fine of Rs 39.244 million. Ramesh Bista was sentenced to 4 years in prison and a fine of Rs 31.68 million for corruption and embezzlement. During the investigation of the scam, the CIB team arrested assistant tellers Regmi and Thapa.

10 million scam case in Rastriya Banijya Bank

A case of loans disbursed by employees of the government-owned Rastriya Banijya Bank by forging government documents in 2077 BS was also made public. In that case, Banke police arrested Lalit Bahadur Shahi, manager of the Tribhuvan Chowk branch of Rastriya Banijya Bank. During the investigation of the case of gold and silver businessman Rizwan Ahmed Jasgadh, who had taken a loan of Rs 12.5 million, the manager Shahi was arrested after the case of forging documents was revealed.

 Rs 15 million theft case in Everest Bank

The involvement of bank employees was also seen in the case of Rs 15 million theft from the Everest Bank branch in Itahari in 2080 BS. After the money was stolen from the accounts of 33 savers, the police arrested 9 people, including the bank's Itahari branch manager. According to the District Police Office, Sunsari, Rs 15 million 23 thousand 434 was stolen from the accounts of 33 customers over a period of five months. Police investigation revealed that bank employees used the ID and password of the customers' Connect IPS to transfer money.

The police arrested Itahari branch manager Bishwaraj Shakya, operations in-charge of the bank's Udayapur Gaighat branch Niraj Pradhan, supervisor of the Itahari branch Dhawa Lama, junior assistant Manoj Ghimire, Devraj Sharma, Ranjit Pandit, tellers Pavitra Katuwal, Shankar Bhujel and Ajay Khiuju on charges of involvement in the theft. According to the police, in Pradhan's scheme, Rs 11.475 million was withdrawn through Connect IPS 59 times in a period of five months, while Rs 3.548 million was withdrawn through fake checks.

Saptakoshi Development Bank Scam Case

A case of embezzlement of Rs 15.774 million 575 thousand was also made public with the involvement of the then CEO of Saptakoshi Development Bank. In that case, the then CEO Navin Subedi, Accounting Chief Devi Prasad Bhandari and General Service Department (GSD) Chief Himal Bhattarai were arrested and sent to prison. The bank's Operations Chief Amit Thapa Magar was also arrested. A banking offence case was registered in the High Court against 12 people, including 9 bank employees and 3 account holders, on the charge of embezzling the amount from the bank in Subedi's scheme.