Borrowers Still Await Return of Gold Looted from National Commercial Bank During Janajati Movement
Borrowers have yet to receive compensation for the gold stolen from the Baneshwor branch of National Commercial Bank during the Janajati movement due to disputes over valuation. While the bank has committed to reimbursing the value at the time of theft, borrowers demand payment based on the current market price on the day of reimbursement. In Bhadra, 17,945 grams of gold and 51.5 million Nepalese rupees in cash were stolen from the bank’s Baneshwor branch.
As of 7 Ashar, Kathmandu, those who had pledged gold at National Commercial Bank’s Baneshwor branch during the Janajati movement have still not recovered their assets. A gap remains between the amount the bank is willing to pay and the market value requested by the borrowers who had used the gold as collateral, resulting in no disbursement of gold or equivalent funds so far.
Although the bank planned to reimburse based on the value on the date of the theft, borrowers insist that compensation should be made according to the market price on the day of payment. Some individuals who pledged gold have even held sit-ins at the bank’s central office. During the Janajati movement on Bhadra 23 and 24, cash and gold equivalent to NPR 384 million were looted from the Baneshwor branch. More than a year and a half has passed without affected borrowers regaining their pledged gold, according to Dipendra Rawal.
“The bank’s unnecessary deductions in the valuation and weight of the gold are unacceptable to us,” Rawal said. “Borrowers should receive compensation based on the weight pledged and the current market price at the time of payment.” Pawan Regmi, Deputy Chief Executive Officer of the bank, explained that the insurance company only reimburses claims based on the value on the date of theft, which influenced the bank’s decision to follow the same basis when compensating borrowers. The bank reported that the total looted assets included 17,945 grams of gold and NPR 51.5 million in cash, amounting to NPR 384 million overall.
There has been little progress in investigating the gold theft. Since the insurance for the pledged gold was arranged through Neco Insurance, which pays claims based on the value at the time of the theft, the bank has resolved to reimburse borrowers on that basis. Regmi stated that if the insurance company had compensated based on the current market price, borrowers would also be reimbursed accordingly. “The process stalled as the surveyor wasn’t able to finalize the valuation,” he noted. “The bank has already decided to reimburse based on the weight and value as of the theft date.” However, borrowers who took loans by pledging gold remain dissatisfied with this decision and have requested reconsideration, which Regmi confirmed will be submitted to the bank’s board of directors.
Regmi added that the board’s reconsideration will determine when the payment process can be implemented. “But since the board is not currently constituted, the decision can only be made once the new structure is in place,” he said, adding that applicants have been informed of the situation. According to decisions made previously by the dormant board of directors, approximately one hundred borrowers have been reimbursed an amount equivalent to the gold and have completed settlements, Regmi said. A total of 226 borrowers had pledged gold that was stolen from the bank. Following the theft of this pledged gold, their interest rates have been waived. “No interest has been applied since last Bhadra,” he stated. “Despite the waiver, the pledged gold could have been returned. Previously, payment was made at the value on the date of theft in similar cases.”
According to Rawal, the agreement was that borrowers would receive the pledged gold back upon loan settlement. “The bank agreed to return the gold based on its pledged weight, but the reimbursement is to be made at the theft date’s price and only after a year,” he said. He emphasized that for borrowers with outstanding loans, the gold’s value should be calculated at the loan maturity date’s market price. Currently, the bank is offering to pay an amount equivalent to the gold’s value as of Bhadra 24 and to settle the remaining loan balance. At that time, gold was priced at NPR 214,700 per tola; currently, the price has risen to NPR 287,300 per tola.
“Even during conflict periods, gold was stolen from various branches, and in those cases payments were made at the market price on the date of theft,” Regmi said, explaining that the bank’s current decision is consistent with earlier practice. He added that the new board will review the applications of borrowers whose pledged gold was stolen once again.
