Banking associations express concern over arrest of NIMB CEO Pandey

KATHMANDU: Four leading banking associations have expressed serious concern about the arrest of Jyoti Prakash Pandey, CEO of Nepal Investment Mega Bank (NIMB), following action by the Central Investigation Bureau (CIB) of Nepal Police on Wednesday.

In a joint statement issued today, Nepal Bankers' Association (NBA), Development Bankers Association Nepal (DBAN), Nepal Financial Institutions Association (NFIA) and Nepal Microfinance Bankers' Association (NMBA) called for urgent attention to the matter.

The associations noted that all banks and financial institutions (BFIs) operate under the Bank and Financial Institution Act, 2073 (2017) and the policies set by Nepal Rastra Bank. They asserted that loan recovery is a primary task and a central responsibility of the chief executive officer, governed by existing law.

Furthermore, the statement said, "Section (57) of the Bank and Financial Institution Act grants special rights to BFIs for loan recovery in instances of non-payment. This is part of the primary process of the bank and falls under the core responsibility of the CEO."

The associations warned that arrests of senior executives over routine loan-recovery activities could damage public trust, harm the reputation of institutions that rely on deposits, and undermine financial stability. They argued that legal action against top executives performing their duties could have wider negative implications for the financial system.

The statement appealed to the relevant authorities to respect the dignity of the chief executive's office and called for a proper investigation that does not involve immediate detention. It urged authorities to "proceed with the investigation process by releasing Pandey from custody as soon as possible, adhering to the principle of 'hear then detain' if an investigation is necessary."