Former Prabhu Bank CEO Ashok Sherchan Sent to Custody in Banking Offense Case

The High Court Patan has ordered the detention of former Prabhu Bank CEO Ashok Sherchan for trial in a banking offense case.

A bench comprising Justices Ganesh Prasad Baral and Raju Kumar Khatiwada issued the order on Tuesday, directing the concerned authorities to keep Sherchan in custody as required by law until the case is adjudicated.

The case has been filed against Sherchan and other defendants with an alleged financial loss, or bigo, of Rs. 20.17 crore. The amount specified in the case is Rs. 201,767,334.30.

Rs. 15 Crore Loan to Guna Airlines Under Investigation

According to the investigation by a Nepal Rastra Bank expert team and the police, Prabhu Bank allegedly extended a Rs. 15 crore loan to Guna Airlines without prior approval from the bank's Board of Directors.

The court order also states that the bank did not receive Rs. 89,319,986.30 in interest that was reportedly payable on the loan.

The investigation and evidence presented before the court were considered in determining whether Sherchan should remain in custody during the trial.

Court Orders Custody for Further Proceedings

The High Court Patan concluded that the available evidence did not establish a basis to consider Sherchan immediately innocent of the allegations.

On that basis, the court ordered his detention for trial under Section 67 of the Criminal Procedure Code, 2074.

The order does not represent a final conviction. The case will proceed through the judicial process, and the allegations against the defendants will ultimately be determined through the court proceedings.

Why This Banking Case Matters

The case has attracted attention because it involves a former chief executive of a major commercial bank and allegations concerning the approval and disbursement of a substantial corporate loan.

For investors and participants in Nepal's banking and financial sector, the case also highlights the importance of banking governance, loan approval procedures, board oversight, credit risk management and regulatory compliance.

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Frequently Asked Questions

1. Who is Ashok Sherchan?

Ashok Sherchan is the former CEO of Prabhu Bank and is a defendant in the banking offense case discussed in this report.

2. Why was Ashok Sherchan sent into custody?

The High Court Patan ordered Sherchan to be detained for trial after considering the available evidence in the banking offense case.

3. How much was the alleged financial loss in the case?

The case was filed with an alleged financial loss of Rs. 20,17,67,334.30, involving Sherchan and other defendants.

4. How much loan was allegedly provided to Guna Airlines?

According to the investigation cited in the court proceedings, Rs. 15 crore was allegedly provided to Guna Airlines without prior approval from the bank's Board of Directors.

5. Does the court's detention order mean Ashok Sherchan has been convicted?

No. An order to keep a defendant in custody for trial is not the same as a final conviction. The case will continue through the judicial process.

6. What law was cited for the detention order?

The High Court Patan cited Section 67 of the Criminal Procedure Code, 2074 as the legal basis for ordering detention for trial.

7. What does this case mean for Nepal's banking sector?

The case highlights the importance of proper credit approval, board-level oversight, banking governance, regulatory compliance and risk management in Nepal's financial sector.

Sarbaguna.com provides stock market education, NEPSE analysis, investment learning resources and Forex trading education in Nepal.

Contact Deep Thapa: WhatsApp 9849290806