Prosecution Of Fraudulent Banking Transactions In Nepal

16 Oct 2025 --
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1. Rastriya Banijya Bank (RBB) Bardibas Branch Fraud (2017)

Facts: Two employees of RBB Bardibas branch withdrew large sums from accounts of institutional clients using forged cheques and fake signatures, totaling approximately NPR 2.5 million.

Prosecution: The Nepal Police, following complaints from the account holders, investigated and arrested the employees. Investigation revealed internal collusion and poor control over signature verification.

Legal Outcome: Employees were charged under the Banking Offence and Punishment Act, 2052 BS (1996) and sections of the Muluki Criminal Code related to fraud and forgery. They were convicted and sentenced to imprisonment with fines.

Significance: Demonstrates that internal staff collusion can lead to large-scale fraud, highlighting the importance of internal banking controls and oversight.

2. Karnali Development Bank Fraud Case (2025)

Facts: Alleged misappropriation of NPR 3.2 billion by top officials, including the former chairman, CEO, and several staff members. Fraud involved manipulation of accounts, unauthorized loans, and collusion with external parties.

Prosecution: The Central Investigation Bureau (CIB) filed charges against 109 accused. Evidence included banking records, internal audit reports, and witness testimony.

Legal Outcome: Several accused were remanded in custody; prosecution is ongoing in the Commercial Bench of the High Court.

Significance: Illustrates prosecution at the level of senior bank officials and systemic failure in corporate governance. Shows that large-scale banking fraud can attract high-profile criminal cases in Nepal.

3. Cheque Fraud – Patan High Court (2022)

Facts: Two individuals issued cheques without maintaining sufficient funds, totaling several million rupees. The cheques bounced, and payees filed complaints.

Prosecution: The CIB tracked the accused, who had absconded initially. The High Court tried the case, applying the Banking Offence and Punishment Act and relevant criminal code provisions.

Legal Outcome: Convicted with jail terms of 5–7 days and fines of approximately NPR 0.89–1.5 million.

Significance: Highlights that cheque fraud, even at relatively smaller scales, is criminalized and actively prosecuted in Nepal.

4. Swarnalakshmi Cooperative Fraud (2025)

Facts: Misappropriation of savings exceeding NPR 2 billion by cooperative executives and staff. Fraud involved using cooperative banking software, issuing fake cheques, and unauthorized withdrawals affecting over 5,000 savers.

Prosecution: Case filed against 39 accused. Investigators seized digital records, accounting data, and applied forensic analysis of banking software to identify irregular transactions.

Legal Outcome: Criminal charges were framed under banking and financial regulatory laws; several accused were remanded while investigations continued.

Significance: Demonstrates that fraudulent banking transactions extend to cooperatives and savings institutions, not only formal banks. Software manipulation and internal collusion are prosecutable offences.

5. Card Fraud at Himalayan Bank (2014)

Facts: A senior IT staff member misused banking software and debit/credit cards, diverting approximately NPR 57.5 million into personal accounts. Fraud involved technical manipulation of the card system.

Prosecution: Following internal audit detection, the CIB arrested the accused. Evidence included transaction logs, system access records, and witness testimony.

Legal Outcome: Conviction under the Banking Offence and Punishment Act and computer-related provisions of the criminal code. Sentencing included imprisonment and restitution of funds.

Significance: Highlights risks posed by employees with access to banking IT systems and the role of digital forensics in prosecuting financial fraud.

6. Khotang Auto-Linked Cheque Fraud (2024)

Facts: An individual issued a cheque worth NPR 300,000 for purchasing a motorcycle without sufficient funds. The cheque bounced, and the payee filed a criminal complaint.

Prosecution: Local police tracked and arrested the accused after he had absconded. Case filed under banking fraud and criminal code provisions.

Legal Outcome: Convicted and ordered to pay fines; the case served as a deterrent for similar offences.

Significance: Demonstrates that banking fraud prosecution covers small to medium-scale transactions, emphasizing enforcement across all regions of Nepal.

7. Nepal Electricity Authority Account Fraud (2018)

Facts: Bank employees attempted unauthorized withdrawals from a government agency account using fake signatures and forged cheques. Losses totaled several hundred thousand rupees.

Prosecution: The agency reported to police; investigation revealed collusion between branch employees and external parties. Charges filed under banking fraud laws.

Legal Outcome: Conviction of staff members; restitution of misappropriated funds ordered.

Significance: Shows that government and institutional accounts are protected under banking fraud laws and fraudulent employees are held criminally liable.