Former NDB chairman Gurung in police net

KATHMANDU, NOV 19 -

Police on Friday arrested Amar Gurung, former chairman of Nepal Development Bank (NDB), from Maharajgunj, Kathmandu. He has been accused of swindling Rs 360.5 million while running the now liquidated NDB and had been on the police’s most wanted list. He was caught by the Central Bureau of Investigation (CBI) of the Nepal Police.

As a result of the misappropriation of a huge amount of money from the promoters including Gurung, NDB, the first development bank of the country, had to be liquidated. It is also the first ever banking institution in the country to see liquidation.

More than a dozen charges have been levelled against the promoters of the bank under the Banking Offence Act, Nepal Rastra Bank Act and the Civil Code. Gurung along with NDB patron Uttam Pun and other officials have been on the dodge for the last three years.

The charges against him include misusing loans, collecting deposits and issuing loans in violation of the directives of the central bank, overvaluation of the collateral and releasing it before the loan has been repaid.

Most of the loans went to the promoters group in disguise that ruined the bank’s health. The bank’s promoters also made foreign trips at the expense of the bank although they had been warned by the central bank for the last five years.

The trend of misusing deposits, the first ever incident made public of NDB and many financial institutions were dragged in later including Gurkha Development Bank.

Nepal Rastra Bank decided to send NDB into liquidation after it continued to disobey its directives for five successive years.

While the liquidation was started, NDB was holding total deposits of Rs 700 million. The liquidation is yet to be completed. While a majority of the depositors were given back their money, institutional depositors including Employees’ Provident Fund and Nepal Army are yet to get their deposits back.

Source: Kantipur