Fiscal Nepal
First Business News Portal in English from Nepal
Bankers association Dban protest
KATHMANDU — Nepal’s banking sector has expressed strong concern following the arrest of Jyoti Prakash Pandey, Chief Executive Officer (CEO) of the Nepal Investment Mega Bank, with four major banking umbrella organizations warning that the move could negatively impact confidence in the country’s financial system.
In a joint press statement issued on Thursday, the Nepal Bankers’ Association, Development Bankers Association Nepal, Nepal Financial Institutions Association, and Nepal Microfinance Bankers Association said they had taken serious note of the incident.
The reaction comes after the Central Investigation Bureau (CIB) of the Nepal Police detained Pandey on Baisakh 30, 2083 BS (May 13, 2026) in connection with an investigation related to banking operations and loan recovery procedures.
Referring to the arrest, the banking associations stated that banks and financial institutions in Nepal operate under the provisions of the Banks and Financial Institutions Act, 2073 (2017) and the regulatory policies and directives issued by the Nepal Rastra Bank.
According to the statement, banks play a central role in Nepal’s economy by mobilizing public deposits and extending credit to support economic growth, employment generation, and entrepreneurship development.
The organizations further argued that loan recovery is a regular banking function, as outlined under Section 57 of the Banking and Financial Institutions Act, and falls within the responsibilities of a bank’s chief executive officer.
They warned that legal action linked to loan recovery procedures, particularly against senior banking executives, could have a negative impact on the reputation of banks and the stability of Nepal’s financial system, potentially weakening public confidence in the sector.
The banking bodies also emphasized the need to uphold the dignity and institutional credibility of chief executive officers while conducting investigations.
Invoking the principle of “Sun Ani Thun” (Hear Before Detention), the associations said that while investigations should proceed wherever necessary, authorities should allow Pandey to remain free during the inquiry process rather than keeping him in custody.
The organizations urged concerned authorities to conduct any required investigation while releasing Pandey from detention, arguing that due process and institutional stability should be balanced carefully.
The arrest has triggered significant discussion within Nepal’s financial and banking circles, as concerns grow over the broader implications of criminal investigations involving top banking executives and their potential effect on financial-sector confidence.
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