Former Kist Bank CEO Kamal Gyanwali to be Released After Serving Approximately Seven Years

Kamal Gyanwali, the former Chief Executive Officer (CEO) of Kist Bank, is set to be released from prison after completing approximately seven years of his jail term, following an order from the Supreme Court. The division bench of Justices Hari Phuyal and Abdulaziz Musalman issued the order for Gyanwali’s release. Although he had already served his full prison sentence, his time in jail was extended due to his failure to pay the mandated fine.

Details of Banking Offence and Sentences

Gyanwali was convicted of a banking offense related to the fraudulent disbursement of loans in the name of Jamko Prakashan Pvt. Ltd. He was implicated in two separate cases concerning the misuse of credit facilities.

• First Case (Patan High Court, October 2, 2016): Gyanwali, his wife Gauri Khanal (Gyanwali), and Kishwar Dhakal were convicted as principal offenders and sentenced to four years in prison. Kamal and Gauri were also ordered to pay the principal amount and a fine of Rs 62.5 million each. Kishwar Dhakal was fined Rs 5 million. Additionally, Komalananda Adhikari was sentenced to four years in prison and a fine of Rs 57.3 million. Kamal’s wife, Gauri, received a slightly reduced sentence of three years, citing consideration of her husband’s influence and her family situation. An additional five individuals involved in this case were sentenced to two years in prison.
• Second Case (Former Patan Appellate Court, May 27, 2016): Kamal Gyanwali was sentenced to four years in prison and a fine of Rs 42.6 million.

The total principal amount (Bigo) and corresponding fine across both cases reached Rs 105.1 million.

Misuse of Loan Disbursement

The banking malpractice involved loan disbursements from both Siddhartha Development Bank and Kist Bank to Jamko Prakashan.

• Siddhartha Development Bank Loan: The bank issued a Rs 130 million loan to Jamko Prakashan. The collateral for this loan was two plots of land in Kathmandu’s Rabibhawan, registered in the name of Gyanwali’s wife, Gauri. This land, initially valued by the bank at approximately Rs 60 million, was used to secure a loan for more than double its worth. Following an investigation into the misuse of the loan, Jamko operator Kishwar Dhakal submitted a petition to Siddhartha Development Bank claiming he had not utilized the funds. A Nepal Rastra Bank (NRB) investigation report stated that the funds were transferred and misused through the Siddhartha Development Bank’s Narayangadh branch, subsequently routed from Prime Bank’s New Road branch. The principal loan amount of Rs 130 million, with the addition of Rs 30 million in interest, had grown to Rs 160 million at the time of the investigation.
• Kist Bank Loan: Kist Bank also extended a Rs 120 million loan to Jamko Prakashan on July 16, 2010. Records show that on the very same day, checks for the total Rs 120 million were issued and distributed in the names of 31 different individuals. The collateral for this loan was a plot of land measuring 1 Ropani 5 Aana, valued at only Rs 5.165 million.

According to the Nepal Rastra Bank’s claim, a total of over Rs 250 million from the banking system was misused through loan disbursements to Jamko Prakashan, described as a mere printing press.