The Nepal Rastra Bank has begun restructuring Karnali Development Bank, which collapsed after failing to return depositors’ funds amid massive fraud. The unprecedented restructuring plan reduces the shareholdings of individuals implicated in the scandal to just one percent and converts depositors’ savings into equity, effectively making depositors the bank’s new owners. According to management team coordinator Tika Ram Khatiwada, shares held by 18 people and two firms accused of embezzlement have been cut to one percent, leaving 99 percent of shares available for depositors. The central bank is now seeking their approval and will then look for new investors to revive the institution under a new name and leadership. On July 30, the Central Investigation Bureau filed a case against 109 individuals for allegedly misappropriating Rs 3.2 billion.
