High-Level probe at Prabhu Bank intensifies: CBO Rashmi Pant under CIB investigation amid media trial

KATHMANDU: Nepal’s banking sector has been thrust into deeper turmoil as the Central Investigation Bureau (CIB) expands its probe into Prabhu Bank, placing Chief Business Officer Rashmi Pant under active search after she went out of contact for three days. Her disappearance follows the high-profile arrest of Chief Executive Officer Ashok Sherchan, Deputy CEO Maniram Pokharel, and Chief Risk Officer Riwaj Shrestha on charges of large-scale fraud, criminal breach of trust, and violations under the Nepal Rastra Bank (NRB) Act, 2058.

The Kathmandu District Court has granted CIB five days of judicial custody for the detained executives as investigators dig into what they describe as a serious corporate banking offense that may have put billions in public deposits and the financial system’s integrity at risk.

CIB ACCUSES A MEDIA-SUPPRESSION SYNDICATE OF ATTEMPTING TO DERAIL INVESTIGATION

Officials close to the investigation allege that a coordinated group with ties to the arrested executives — and to CBO Pant — has launched a deliberate media trial strategy to distort the case and shield key suspects.

“A specific circle is trying to sabotage the investigation by branding it as political retaliation,” a senior CIB officer said. “Billions of rupees belonging to Nepali citizens are at stake, and attempting to influence or derail an investigation of this scale is a criminal act in itself.”

The official further warned that if such a high-value banking fraud is dismissed as a political feud, it would embolden impunity, weaken Nepal’s regulatory credibility, and erode public trust in the banking system.

“This is how impunity becomes institutionalized in the financial sector,” the officer added. “If offenders hide behind politics and media manipulation, Nepal’s banking governance risks collapsing.”

PANT AND CEO OFFICE STAFF UNDER DIRECT CIB SURVEILLANCE

CIB has confirmed that CBO Rashmi Pant and CEO office staffer Dinesh Dangol are directly under investigation. Both have remained unreachable since the arrests began, raising suspicions of evidence destruction and signaling deeper institutional involvement.

Earlier, CIB raided Prabhu Bank’s Bijulibazar central office on Kartik 22, seizing nearly three dozen confidential loan-related documents, including internal memos and credit files linked to high-risk lending decisions.

The investigation stems from a complaint filed by Prabhu Management Pvt. Ltd. chairperson Kusum Lama, accusing former Prabhu Group Chairman Devi Prakash Bhattachan of misappropriating nearly Rs 1 billion through irregular lending in collusion with senior bank officials. Bhattachan was arrested on Kartik 11 but later released by the court.

IMF-MANDATED FOREIGN AUDIT INTENSIFIES SCRUTINY OF NEPAL’S BANKING SYSTEM

The timing of Sherchan’s arrest coincides with a major shift in Nepal’s financial regulatory environment. A Bangladeshi audit firm has officially begun reviewing the loan portfolios of Nepal’s ten largest commercial banks, including top A-class institutions, under a mandatory requirement set by the International Monetary Fund (IMF) through its Extended Credit Facility (ECF) program.

The independent audit — strongly demanded by the IMF — commenced on September 1 after months of delay and mounting pressure on the Nepal Rastra Bank (NRB) to strengthen transparency, credit-risk management systems, and financial reporting accuracy.

The IMF had raised red flags over the true quality of banks’ loan books, especially loans issued under the COVID-era refinancing program, which global financial analysts believe may have concealed a significant volume of non-performing assets (NPAs).

IMF officials had publicly expressed frustration at NRB’s repeated postponements in hiring an independent auditor — warning that governance gaps, regulatory weaknesses, and delayed reforms could threaten financial stability, investment confidence, and international credibility as Nepal battles slow economic growth, rising credit risk, and liquidity stress.

A CRISIS WITH SYSTEMIC IMPLICATIONS FOR NEPAL’S ECONOMY

The convergence of a massive fraud probe, disappearing senior executives, and IMF-mandated foreign audits has raised alarm across Nepal’s financial and investment landscape. Global observers say the case showcases deep structural weaknesses in Nepal’s banking governance, compliance culture, and internal control mechanisms.

For NRB, the case represents a defining test of regulatory authority at a time when international institutions are questioning Nepal’s banking discipline and corporate governance standards.

As the manhunt for CBO Rashmi Pant widens, investigators say the coming days will determine whether Nepal’s financial enforcement agencies can confront high-level corporate crime — without political pressure, media interference, or institutional compromise.