Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal’s banking sector has been rattled once again after the Central Investigation Bureau (CIB) on Wednesday arrested Guna Group Chairman and Guna Airlines promoter Rajendra Shakya for his alleged role in the widening Prabhu Bank fraud scandal, a case that has already led to the detention of the bank’s top management.
Shakya was arrested from Jawalakhel, Lalitpur, following a warrant issued under allegations of banking fraud, criminal breach of trust, and large-scale misuse of credit facilities. According to CIB, Shakya colluded with senior Prabhu Bank officials to channel hundreds of millions of rupees in corporate loans through multiple companies, diverting the funds for personal and business interests and causing substantial losses to the commercial bank.
The arrest follows earlier CIB action against CEO Ashok Sherchan, Deputy CEO Prakash Pokhrel, and CIO Riwaj Shrestha, who remain under judicial custody for violating Nepal Rastra Bank (NRB) regulations and the Banking Offence and Punishment Act, 2064. Investigators say financial documents, transaction trails, and expert analyses show that the officials misused authority, breached compliance norms, and executed irregular lending practices that undermined the bank’s financial stability.
The scandal has raised fresh concerns about Nepal’s banking governance, transparency, digital banking reliability, fintech trust, capital market health, and FDI confidence, especially at a time when the country is promoting digital payments, investment reforms, and tourism-driven economic growth.
CIB officials said additional arrests are likely as investigators map money flows across business networks linked to Guna Group and Prabhu Bank’s former leadership. The case is now regarded as one of Nepal’s most serious corporate fraud investigations, carrying significant implications for the country’s financial regulation, investor protection, and overall economic credibility.
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