Kathmandu. Employees working at Prachanda branch of Nepal Laghubitta Bittiya Sanstha Limited have been accused of embezzling Rs1,30,076,000 by preparing forged documents in the name of savers.The victims have accused the bank of showing loans in the name of 98 savers, withdrawing money from fixed deposits and personal savings accounts.

Headquartered in Pokhara, the company is a ‘D’ class ‘D’ licensed microfinance financial institution from Nepal Rastra Bank . There are 56 women’s groups in different areas of Khatyad Rural Municipality under the Prachanda branch. The group has 711 members. The victims claimed that 98 of them were irregularities in the names of savers. Based on the complaint of the victims, a case has been registered at the High Court, Surkhet against the employees of the branch Ganesh Chaulagain, Tulsi Shahi and Tika Prasad banking .According to Prem Prakash Thapa,acting regi strar of the Surkhet High Court, the case was registered on June 3, 2008.

As the case is sub-judice, the Surkhet High Court has coordinated with the District Court, Mugu, to record the statements of the victims through audio-visual medium as government witnesses.The court has remanded all three accused on bail. The victims have alleged that not only in the name of loans, but also in the name of their savings and fixed account amounts, and the amount of the fixed account were irredeemably withdrawn. Documents showing that Khatyad Rural Municipality-4 Higotiki Risu BK have taken a loan of Rs 100,000. But her husband, and , said that they have not taken any loan.

He said that although the documents show that they have paid Rs 20,000 in installments and more than Rs 75,000 are due, they have not taken the loan and have not paid the installment.The victims claimed that documents were prepared in the name of seven members of the 15-member women’s group who had taken a loan of Rs 75,000 each.

Similarly , a loan of Rs. 1 lakh has been shown in the name of Nanda Devi Shahi of Khatyad-2.Although the documents mention that they have paid Rs 48,000 in installments, the family has stated that they have not taken any loan and have not deposited the amount.

Savings and Fixed Amount Questions

According to the victims, the irregularities are not limited to loans. It is alleged that the savings amount deposited by the savers and personal savings were also withdrawn.Durga Baniya Rokaya of Khatyad-4 had deposited Rs 200,000 in a microfinance account in a fixed account .She also received interest for some time and when she went to withdraw the money when needed, she was informed that the amount had been withdrawn after adjusting the documents and the account had been closed.

Similarly, the employees have also withdrawn Rs 1,50,000 from Biura Baniya’s account by preparing forged documents and making the account void. The family of Bir Bahadur Sarki of Higoti has been found to have taken a loan of Rs 150,000 in the name of his mother Jhuppa Sarki.Similarly, the family has also claimed that a loan of Rs 1 lakh has been shown in the name of Chinkala Sarki, who is not associated with a financial institution.

The victims have said that they have increased financial and mental problems after being shown the liability of the loan they did not take.

Additional financial burden on seeking justice

The victims said that they had to bear additional financial burden due to their participation in the investigation of irregularities and the court process. According to Pabita Rawat of Khatyad-7, she has to go to the district headquarters three times for investigation and statement. According to him, he spends Rs 15,000 to Rs 20,000 at a time while staying in the district headquarters.

The victims have complained that their source of income has been affected as they have to visit the district headquarters frequently during the farming season.Another victim, Bachu Viyal, said she too was booked on forged documents and was unable to repay the loan. After the case was registered at the High Court, Surkhet, he had to go to Surkhet to give statement as a government witness. However, the District Court, Mugu, has provided some relief to the victims after the Mugu District Court made arrangements for recording the statement through audio-visual medium.

According to the victims, it costs more than Rs 20,000 per person to reach Surkhet and return. According to them, it has become more difficult to participate in the judicial process as road transport is not easy during the rainy season.

The victims have now demanded that the process of filing statements be made faster and easier.As it takes more than 40 minutes to record the statement of a victim, they have demanded that the statement of two to three people should be recorded at the same time.

Since the case is sub judice in the court, the final confirmation of the charges will be made only after the court’s decision.However, after the allegations of irregularities related to loans and savings in the name of 98 savers of the same branch came to light, questions have been raised on the internal control of the microfinance institution, the provision of savings security of the customers and the monitoring system.