Niraj Nepal, manager of the bank´s Kuleshwor branch office, is said to have inflicted the loss by issuing fake good-for-payment checks in collusion with some businessmen, among others.[break]
Nepal, who is said to be in his late 20s, is now in police custody.
“We are currently investigating the ploys that were used to trick the bank, the amount embezzled and the people involved,” DSP Arun BC, chief of crime investigation department at the Metropolitan Police Range Office, Kathmandu, told Republica.
The bank is also said to have launched its own investigation into the case, although CEO Jasoda Sainju was not available for comment as of the time of filing this story.
Nepal´s fraud came to light after the bank head office detected a considerable shortfall in its vault. As it tried to track the lost amount, it detected huge withdrawals against good-for-payment checks for which records are not available, a reliable source at Nepal Rastra Bank, which is closely monitoring the situation, told Republica.
Banks issue good-for-payment checks against cash parked by depositors in their accounts. The advantage of these checks is that they can be converted into cash at any financial institution. This gives depositors or check bearers leeway to walk about without any cash in hand unless the need arises.
But prior to releasing the check amount to the person cashing the check, institutions usually seek confirmation from the unit that issued the check. And this is where Nepal is suspected to have abused his authority as branch manager.
“Instead of ringing the alarm, Nepal probably gave a green signal to the institutions involved to convert the fake checks into cash, despite knowing that the depositor did not have enough cash in the account to cover the payment. Later, he must have released the amounts from the bank to repay the institutions cashing the fake checks,” the source said.
The source also said the case might be just the tip of the iceberg and other devious techniques may have been deployed to defraud the bank. The bank was formed through merger of Himchuli Bikas Bank and Birgunj Finance Limited.
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