Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Rajendra Bir Raya, the former Chairman and Chief Executive Officer (CEO) of Karnali Development Bank, has been arrested on charges of embezzling more than NPR 2.5 billion. The Central Investigation Bureau (CIB) of Nepal Police detained Raya on May 31, 2025, from Belahiya, Siddharthanagar Municipality-1, Rupandehi, according to CIB spokesperson Yubaraj Khadka.
Raya, a resident of Banke, faces allegations of misappropriating depositors’ funds during his tenure as CEO from 2019 to 2022 and as a long-serving board chairman. The investigation is being conducted under the Banking Offences and Punishment Act, 2064, in coordination with Nepal Rastra Bank.
Karnali Development Bank, established in 2004, came under scrutiny after a probe committee, formed on December 20 last year under board chairman Om Prakash Mishra, uncovered embezzlement exceeding NPR 1.26 billion. Further investigations revealed the scale of the fraud, prompting Nepal Rastra Bank to declare the bank problematic and take over its management due to a bad loan ratio of 40.85% and a capital adequacy ratio below 4%.
Others implicated in the case include former CEO Dinesh Kumar Rawat, former head of the finance department Bed Prakash Thakuri, and current CEO and finance department head Niraj Bikram Shah, who are also under investigation.
CIB chief Additional Inspector General Chandra Kuber Khapung stated that Raya had been on the run following the allegations. Authorities are continuing their probe to uncover the full extent of the financial misconduct.
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