The Bhutanese Leading the way.
The Royal Bhutan Police (RBP) has completed its investigation into a case involving a businessman who allegedly used approximately Nu 191 million (mn) after a data migration error during a system upgrade at the Bank of Bhutan mistakenly credited about Nu 1.5 billion to his account.
The police have recommended two charges under the Penal Code of Bhutan which are larceny, and larceny of property lost, mislaid, or delivered by mistake.
The case will now be forwarded to the Office of the Attorney General (OAG), which will determine whether to prosecute and what charges, if any, should be filed.
The charge of larceny is for the period between 15th February 2026 and 1st March 2026 when for account 82 the businessman allegedly used MBoB to transfer out around Nu 11.2 mn from this account despite it going in minus balance. He used the money for a variety of reasons from paying suppliers to a certain amount for land transaction.
Larceny is under section 240 which essentially means theft. The section says, “A defendant shall be guilty of the offence of larceny, if the defendant takes or moves the property of another person without the owner’s consent and with the intent to deprive the owner of the property or to appropriate the same to the defendant or a third person.”
The offence of larceny is subject to value-based sentencing. This essentially means if the judge so decides he could face a long time in prison given the value of Nu 11.2 mn converted into prison time based on the minimum national wage.
The maximum sentence that can be given under valued-based sentencing is felony of the second degree which is from 9 to 15 years, and here, if he is prosecuted, this may become applicable since the value of the amount exceeds 60 years of minimum wages.
The police said this charge may be applicable since the businessman transferred some of the money from the faulty account with unlimited balance to his other business accounts knowingly.
For the remaining around Nu 180 mn, he used after money had been credited to his account 13 from account 82 the charge recommended by the RBP against him is larceny of property lost, mislaid or delivered by mistake under section 253 of the Penal Code.
Section 253 of the Penal Code of Bhutan states, “A defendant shall be guilty of larceny of property lost, mislaid, or delivered by mistake, if the defendant comes into control of property known to have been lost, mislaid, or delivered under a mistake as to the nature or amount of the property or the identity of the recipient and with the purpose of depriving the owner thereof, the defendant fails to take reasonable measures to restore the property to the person entitled to it.”
This is a petty misdemeanor charge.
According to the police, the businessman found large sums of money in his account that did not belong to him and proceeded to use it which is equivalent to finding someone else’s money and not returning it, and instead using it.
A petty misdemeanour carries a sentence ranging from one month to less than one year in prison, although the court may allow the payment of Thrimthue in lieu of imprisonment.
Meanwhile, the family of the defendant said they are awaiting for the charge sheet before giving any response. The family also said they are waiting for bail to be given since the businessman has been behind bars for 49 days.
The technical source of the problem, was the failure to migrate some data from the old system to the new system.
The Bank of Bhutan (BoB) from 2024 was working to upgrade its Core Banking System (CBS) to a new global banking platform with Tata Consultancy Services (TCS) as the main consultant, and the main migration was done on 12th and 13th February this year.
There was one TCS team to download the existing data and another TCS team to upload this data to the new system. The BoB had even hired an independent consultant to look at the process independently.
However, one particular set of data or instructions was not uploaded to the new system, causing the whole issue.
This data had to do with certain accounts where a Standing Instruction (SI) is given whereby the balances in these master accounts are transferred or swept to one linked account identified by the account holder.
The instruction in the system should have been ‘4EOD’ on the tab or field which has a whole program behind it, but this information was never transferred to the new system keeping the field or tab blank and as a result the particular system without the proper instruction of ‘4 EOD’ started executing all kinds of sweeps or transfers leading to the problem.
In the case of this particular master account of 82, the SI or instruction had been to keep Nu 1,000 balance and transfer the rest by the end of day to linked account 13, however, instead of doing that the master account 82 went erratic and transferred huge amounts to linked account 13.
The problem has since been detected and fixed for now.
BoB has recovered a major part of the money.
The Royal Monetary Authority imposed penalties of Nu 228 mn and asked for an independent assessment and corrective measures.
