Supreme Court refuses to free Kist Bank ex-chief Gyawali

The Apex Court today refused to free the then chief of Kist Bank Kamal Gyawali, who has been serving a jail sentence after being convicted of banking fraud.
A division bench of justices Kedar Prasad Chalise and Dambar Bahadur Shahi rejected the plea to free Gyawali after the hearing on a case filed by Gyawali himself.
The Supreme Court rejected his plea to release him through a habeas corpus order even though he claimed that he has been detained illegally. Gyawali claimed that he was convicted by the Patan High Court and still was supposed to file an appeal at the Supreme Court. Gyawali also claimed that he had surrendered before the court respecting the verdict but sending him to jail when he still has the right to file an appeal against the judgment at the Supreme Court was 'illegal'.
Gyawali has been serving a four-year jail sentence according to the decision of the Patan High Court which also imposed a fine of Rs 42.7 million on him for bank fraud.
He was convicted for releasing millions of rupees in the name of Jamko Prakashan illegally by exercising his power – as chief executive officer – for which he was prosecuted at the High Court Patan. Borrowers Kishor Dhakal and Devaki Bastakoti and evaluator Komananda Adhikary were also convicted along with him. They had released millions with the collateral of a low quality land through overvaluation.

CIB arrests Kist Bank higher officials; new acting chief appointed

The Centrel Bureau of Investigation (CIB) under Nepal Police today afternoon arrested three higher officials of Kist Bank on chargess of lending Jamko Publication without enough collateral.

The CIB arrested acting chief executive of Kist Bank Bal Narsimha Gharti, deputy general manager Pragun Shrestha, deputy manager Manjay Raj pandey and valuator Komananda Adhikari for their involvement in the lending.

Likewise, CIB has arrested the then director and head of the Lending Committee of Siddhartha Development Bank Madan Bahadur Basnet, who is accused of being involved in lending Rs 49.9 million to Shova Giri, has also been arrested on November 20.

Kist Bank had lent Rs 120 million to the Jamko Publication for its business expansion without enough collateral, the CIB said, adding that it has been in search for some more officials involved in the case.

In the same case of lending Jamko Publication, the CIB had in June arrested Gauri Khanal Gnawali, the wife of then managing director of the bank Kamal Prasad Gnawali, who resigned after the arrest of his wife.
Kist Bank had appointed Bal Narsimha Gharti as acting chief executive after Gnawali's resignation.

Likewise, the bank has today appointed Bhesraj Khatiwada as acting chief of the bank that is planning to hold annual general meeting next month.

Kist Bank that has some Rs 20 billion deposit – by the end of the first quarter of the current fiscal year – has been improving its financial health as it has been reducing its toxic assets and cutting down the realty lending to the central bank prescribed level. It has also reduced its loss to Rs 27.40 million in the first quarter of the current fiscal year.

The bank's share trading has been suspended by the Nepal Stock Exchange (Nepse) as it was planning to merge with Vibor Development Bank. But the merger plan was dropped recently and the bank was planning to start its share trading at the Nepse this week.

Kist, Vibor call off merger

Due to differences over how to move ahead in the post merger scenario Kist Bank and Vibor Bikas Bank today decided to call it a quit after eight months of signing Memorandum of Understanding (MoU).

The confusion started after the exit in June of the then managing director of Kist Bank Kamal Gnawali – over the embezzlement  – who was supposed to be the chief executive of the merged entity.

"The merger process was sailing smoothly aiming at concluding it within the last fiscal year till June," a source at the merger committee that has three representatives from Kist and two from Vibor.

A meeting of the merger committee today decided to table the decision not to move ahead with merger process at their respective financial institutions to officially close the merger chapter between them.

Kist and Jyoti Group's Vibor had signed the MoU on March 21. But they have not yet completed due diligence audit (DDA) that would help fix the share swap ratio. They have also failed to reduce their non-performing loans (NPLs) below five per cent within three months as they have agreed during the agreement.

The delay has made the shareholders of both the financial institutions impatient as they have not been able to sell their shares. Nepal Stock Exchange (Nepse) has suspended the trading of the shares of both the financial institutions after they started merger process.

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Kist Bank staffer held for fraud

The police today arrested six people for defrauding Kist Bank of Rs 8 million.

“We have arrested six people – including head teller at the Thamel branch of Kist Bank Rohit Lal Shrestha (34) – for defrauding the bank of Rs 8 million on August 26,” said the Metropolitan Police Crime Division, here today.

Laxman Adhikari (26) of Gorkha, Prakash Nepali (24) of Chitwan, Rameshwar Paudel (26) of Nuwakot, Amrit Tamang Lama (33) of Kavre and Krishna Sijwal (44) of Pyuthan are other arrested by the police.

The division had formed an investigation team under SP Hari Bahadur Pal after Kist Bank sought police help on August 26.

 “Thamel branch teller head Shrestha was the mastermind behind the plot,” said the police. “He had hiring five people to execute the plan,” the police said, adding that Shrestha had planned to clear his debt with the money.

“According to Shrestha’s plan, Paudel called the Thamel branch office asking for Rs 8 million,” the police said. “He identified himself as manager of the bank’s Kalanki branch Gyanendra Khadka and said that he was sending Nepali and Sijwal to the Thamel branch to collect cash his branch has run out of cash.”
 Shrestha was well aware that branch offices would help each other out in case of cash crunch. According to the plan, Nepali and Sijwal – clad in bank uniform – went to Thamel branch office ‘to receive the cash’ and Shrestha made the payment.

Shrestha alone got Rs 2.9 million, while others shared Rs 100,000 to Rs 2.2 million, according to the Police that has managed to recover Rs 6.58 million and a Pulsar bike Lama had bought with the cash.

After executing the plan and sharing the cash, Adhikari and Nepali fled to India, while others stayed in Kathmandu.  
A special team from the division had brought the two from India with support from Indian police.

Police has charged Shrestha and his accomplices with fraud but investigating on possibility of bank’s other staff’s involvement.

Jyoti Group's Vibor Bikas Bank, Kist Bank to merge

Jyoti Group — a reputed business house of the country — is ready to take control of a commercial bank soon.

The group — that had merged its class 'C' financial institution Bhajuratna Finance with class 'B' Vibor Bikas Bank last year — today signed a memorandum of understanding for the merger process of Vibor Bikas Bank with Kist Bank.

"A merger committee including representatives of both the financial institutions will be formed soon," said chairman of Vibor Bikas Bank Dr Roop Jyoti. "The committee will appoint a reputed chartered accountant for the due diligence audit that will define the share swap ratio between the two institutions," he said, adding that the merged commercial bank will be a strong financial institution.

Kist Bank has a network of 51 branches, whereas Vibor has six. Likewise, Kist has a paid up capital of Rs 2 billion, while Vibor has a paid up capital of Rs 916.2 million.

The annual general meeting of Kist Bank had approved the merger of the bank, said managing director of Kist Bank Kamal Gnawali, promising that the merged entity will come into operations within the current fiscal year as both the financial institutions have many similarities in their operations.

Currently, Kist Bank's NPA stands at 7.15 per cent due to real estate lendings. "But the bank has reduced its real estate loans considerably," Gnawali claimed.

Likewise, Vibor Bikas Bank has also divested its property business and has improved its financial condition, informed its director Ajay Ghimire.

Bhandari to lead NBA

Chief executive officer of Citizens Bank International Rajan Singh Bhandari was elected as the president of Nepal Bankers' Association (NBA) today. He succeeded chief executive of Himalayan Bank Ashoke Sumsher JB Rana.

Bhandari, who is a former employee of central bank, has been serving Citizens Bank International since its inception in April 2007. Currently, the bank has a network of 14 branches in Kathmandu valley and 18 outside the valley.

According to Nepal Bankers Association's rule, the president and other executive members are elected every alternate year. It has a 13-member executive committee including two vice presidents, eight members and two advisors.

The executives include Upendra Poudel as vice president. After Bhandari, who was vice president, has been elected to president, one vice president's post is vacant, which will be filled in a week. 

Similarly, the other eight executive committee members are chief executive of Nabil Bank Anil Gyawali, chief executive of Janata Bank Bijaya Pant, chief executive of Century Commercial Bank Ganesh Kumar Shrestha, managing director of Kist Bank Kamal Prasad Gnawali, chief executive of Civil Bank Kishore Maharjan, chief executive of Rastriya Banijya Bank Krishna Prasad Sharma, chief executive of Standard Chartered Bank Nepal Joseph Silvanus and chief executive of NIC Bank Sashin Joshi.

Chairman of Nepal Investment Bank Prithivi Bahadur Pande has been nominated as advisor. The post for the other advisor is vacant.