Kathmandu: In a major blow to Nepal’s banking sector, Ashok Sherchan, the long-serving CEO of Prabhu Bank, was arrested on Sunday by a team from the Nepal Police’s Central Investigation Bureau (CIB).
The arrest stems from an ongoing probe into alleged loan irregularities involving the bank’s former chairman, Devi Prakash Bhattarai. CIB spokesperson SSP Shiva Kumar Shrestha confirmed to Clickmandu that Sherchan was detained in connection with the Bhattarai case, which centers on the questionable disbursement of nearly Rs 1 billion (about US$ 7.5 million) in loans to Prabhu Management Pvt Ltd – a firm linked to Bhattarai and current board member Kusum Lama.
The scandal erupted on 28 October when the police took Bhattarai into custody following a fraud complaint filed by Lama herself, accusing him of embezzling Rs 98 million through the loan. Just two weeks later, on 15 November, CIB officers raided Prabhu Bank’s central office in Bijulibazar, seizing key documents related to the loans.
This isn’t the first controversy for Prabhu Bank leadership. Earlier this year, a separate complaint was filed against Sherchan at CIB, alleging unauthorized misuse of bank assets and causing financial harm. Demands for his arrest and fund recovery were made public in March 2025. The bank, one of Nepal’s prominent commercial lenders, has faced prior scrutiny, including a 2022 central bank alert for non-compliance with withholding orders.
Sherchan, a 29-year banking veteran from Baglung rose from junior roles at Nepal Bangladesh Bank to lead Prabhu since 2014.
CIB says the investigation continues, with more details expected soon. For Prabhu Bank customers and investors, the fallout could ripple through operations and stock performance in the coming weeks.
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