Rajendra Bir Raya, founding chairman and former chief executive officer of Karnali Development Bank, has been arrested on charges of embezzling over Rs2.5 billion from the bank.

According to the Central Investigation Bureau (CIB) of Nepal Police, Raya was arrested on Saturday from Belahiya in Rupandehi. CIB Chief Additional Inspector General (AIG) Chandra Kuber Khapung said Raya had been on the run after being accused of embezzlement.

Raya, who hails from Salyan and currently resides in Banke, served as the bank’s CEO between 2019 and 2022 and held the position of board chairman at different times. The CIB said it has launched an investigation against him under the Banking Offences and Punishment Act.

AIG Khapung added that other individuals are also under investigation in connection with the case. They include former CEO Dinesh Kumar Rawat, former finance department chief Bed Prakash Thakuri, and current CEO and finance department chief Niraj Bikram Shah.

Following the allegations, a probe committee was formed under the coordination of board chairman Om Prakash Mishra on December 20 last year. The committee found that Raya and others were involved in embezzling more than Rs1.26 billion and recommended further investigation.