In Nepal, bankers are learning to fear the loan

Police investigations and arrests over lending and loan recovery are raising a fundamental question about who should police the banking system: the central bank or law enforcement agencies.

In September 2019, the Central Investigation Bureau (CIB) of Nepal Police arrested 11 employees of the then Bank of Kathmandu, now merged with Global IME Bank Limited, including its then chief executive officer, accusing them of extending a loan secured by riverbed land as collateral. The case was decided three years ago. Borrower Surendra Shrestha was convicted, while the bank’s CEO and ten other employees were acquitted. The case is now before the Supreme Court.