CIB blacklists businessman LB Shrestha on check fraud case

KATHMANDU, Sept 18: 

Credit Information Bureau (CIB) has blacklisted Laxmi Bahadur Shrestha, managing director of NB Group that promotes Nepal Bangladesh Bank, NCC Bank and National Hydropower, among others, for issuing check that could not be processed because of insufficient balance in the account.

The CIB had enrolled the name of Shrestha in the list of notorious lenders based on a complaint filed by Shubhechchha Bikas Bank of Narayangadh, Chitwan. 

The source, however, could not confirm the amount involved in the check transaction. The name of the person or firm who was extended the check also could not be confirmed.

Shrestha, meanwhile, confirmed the blacklisting but did not elaborate. “I´m currently out of station and will be arriving Kathmandu tomorrow (Tuesday). We can talk then,” he told Republica.

The latest CIB decision means, Shrestha, who recently submitted his resignation from the board of Nepal Bangladesh Bank for his involvement in financial irregularity, will have to depart from the board of NB Insurance, where he is one of the directors, as the latest directive issued by the insurance sector regulator bars blacklisted individuals from assuming such posts. 

As per the law that governs the banking sector, any person or firm that issues a check with apparent knowledge that the account does not contain enough funds has to be blacklisted.

Under such circumstances, the issuer of the check, which has once been bounced, is given a time of two office days to deposit enough funds in the account to cover the check payment.

If the amount is not deposited within the timeframe, the bearer of the check can file a complaint at the bank that has to release the payment. The bank then asks the issuer of the check to amend the mistake within seven days, excluding public holidays. If the correction is not made by then, the bank has to write to CIB to blacklist the person or the firm, or face regulatory action.

As per the Banking Offence and Punishment Act, such financial crime also draws a fine of up to Rs 10,000.

Shrestha and his NB Group have a long history of involvement in financial irregularities. Recently, Nepal Rastra Bank (NRB) had identified Shrestha as one of the promoters involved in embezzlement of over Rs 1 billion from Nepal Bangladesh Bank´s coffer. 

The Insurance Board, the insurance sector regulator, has also temporarily suspended business of NB Insurance, in which Shrestha is one of the promoters, for misappropriating millions of rupees in funds collected from the public.

Recently, Nabil Bank also issued a public notice, asking LB Shrestha among others to pay back the loan amount that he owes to the bank. If he fails to do so, CIB will have to enter his name once again to the list of blacklisted people.

Source: Republica