Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: A major financial irregularity has been uncovered at a branch of Citizens Bank International Limited in eastern Nepal, where nearly Rs49.1 million was allegedly embezzled through fraudulent loan processing involving bank employees.
The incident occurred at the bank’s Kanchanbari branch in Biratnagar, where an internal audit reportedly revealed that funds had been misappropriated by creating fake loan files using fixed deposit accounts as collateral.
Following the discovery, the bank administration has suspended five employees suspected of involvement and filed a formal complaint with the Nepal Police for investigation.
Chief of the Morang District Police Office, Superintendent of Police Kavid Katuwal, confirmed that a complaint has been registered and an investigation is underway.
“We have received the complaint and have begun an investigation. Since the inquiry is ongoing, it is too early to draw definitive conclusions,” SP Katuwal said, adding that the police have requested necessary documents from the bank to support the probe.
Internal Audit Exposes Fraud Scheme
Sources within the bank say the internal audit found evidence suggesting that the fraud was orchestrated by a group of employees allegedly led by branch staff member Roji Kandel.
According to preliminary findings, the employees reportedly used customers’ fixed deposits as collateral to create fictitious loan accounts, enabling them to withdraw large sums of money fraudulently.
After the irregularities were detected, the bank suspended the implicated employees and initiated legal action to recover the misappropriated funds and hold those responsible accountable.
The police investigation is expected to examine the internal banking processes, loan documentation, and employee roles in order to determine the full extent of the alleged fraud and identify all individuals involved in the embezzlement scheme.
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