CIB Detains Prabhu Bank CEO Ashok Sherchan, Deputy CEO and CCO Over Alleged Major Financial Misconduct

The Central Investigation Bureau (CIB) of Nepal Police on Sunday arrested Prabhu Bank CEO Ashok Sherchan following an arrest warrant issued by the Patan High Court under the Banking Offense and Punishment Act, 2007. CIB detained Sherchan from the bank’s Babarmahal office and began questioning him over allegations of issuing illegal loans, violating Nepal Rastra Bank directives, and misusing bank resources.

Deputy CEO Mani Ram Pokharel and Chief Credit Officer Rivas Shrestha were also taken into custody on charges of facilitating fraudulent loan disbursements worth tens of millions of rupees through multiple companies. The bureau claimed Sherchan alone misappropriated Rs 980 million. The arrests follow a CIB raid on the bank’s head office earlier this month and come after Prabhu Group chairperson Devi Prakash Bhattachan was arrested in connection with the same case.

Complaints filed by Prabhu Management chairperson Kusum Lama triggered the investigation, though Lama himself is being probed under the Nepal Rastra Bank Act, 2002. Investigators said Prabhu Management and Prabhu Money Transfer had illegally handled remittance funds, used the hundi channel for reconciliation, and failed to reimburse several cooperatives—over three dozen of which have now lodged complaints. The developments coincide with an external audit of loan portfolios at major commercial banks as part of IMF-required reforms.