BDBL Credit Assistant under ACC investigation for loans to self, family and others

The Anti Corruption Commission (ACC) is currently investigating Karma Wangchuk, the former credit assistant of the Bhutan Development Bank Limited (BDBL) branches in Samdrup Jongkhar and Dagana.

Karma Wangchuk began his career as a credit assistant at Samdrupjongkhar on 27 April 2012 and he was later transferred to the Dagana branch in early 2016 where he served from 2016 -2017.

A Royal Audit Authority (RAA) report says during this period, he took out loans in the names of his wife and sisters and also favored other clients without exercising due diligence in the loan disbursement process.

During the tenure of his stay at Samdrup Jongkhar, Karma Wangchuk had disbursed five loans of Nu. 2.670 million (mn) to his close relatives through fraudulent means.

In one loan documents like the family tree, a copy of the mortgage registration letter, a letter of authority, and a thram copy were taken from other loan files and in another loan besides the blank loan application form signed by the client no other document was attached in the loan file.

The loan accounts which Karma Wangchuk dealt with were reviewed on a sample basis and observed that there are numerous clients whose loans were appraised and recommended for approval despite NPL indicating lack of due diligence exercised or wilful intent to perpetrate fraud.

Loans of Nu. 8.535 mn were sanctioned to five clients from BO, Samdrup Jongkhar to clear off old loans without fulfilling the processes and requirements.

Two transport loans of Nu. 1.314 mn were sanctioned based on the same Project Appraisal in the name of his wife Cheten Zangmo. For the second transport loan there were no insurance documents, vehicle registration details (blue book) and Central Registry for Secure Transactions in Movable Property

Review of second Transport loan in the name of Cheten Zangmo found the Project Appraisal report for the second Transport loan is the same as the first transport loan in the name of Cheten Zangmo.

From the above lapses and missing documents it was clear that the second transport loan in the name of Cheten Zangmo amounting to Nu. 500,000 was approved based on inadequate appraisal by Karma Wangchuk as appraising officer and Ugyen Tshewang as approving officer.

A personal loan of Nu. 490,000 was sanctioned to his wife, Cheten Zangmo without the consent of Chimi Lhamo, owner of the land which was mortgaged. The RAA found that the lag thram was not released by the bank even after liquidation of loan availed by Chimi Lhamo but was used to sanction the loan to his wife.

The loan application was without approval from the approving authority and was appraised and recommended by Karma Wangchuk, legal documents were without the branch Manager’s signature, sanction letter without approving authority’s signature and the disbursement letter without Manager’s Approval which was prepared by Karma Wangchuk.

It was noted that the loan was mortgaged with the land measuring 3.44 acres located at Trashigang, Tseza bearing Thram No. 406 in the name of Chimi Lhamo

On enquiry, Chimi Lhamo has provided written statement dated 2 July 2022, stating that she had availed loan amounting to Nu. 150,000 by mortgaging her land bearing Thram No. 406. And after her loan was fully liquidated, her lag thram was not handed over to her.

She came to know her lag thram was again mortgaged for loan amounting to Nu. 490,000.00 when the bank officials followed up on defaulting loan. The statement also stated that she was unaware of giving a letter of authority and family’s consent letter to mortgage her land.

RAA says Karma Wangchuk has intentionally availed loan for his wife, Cheten Zangmo by mortgaging Chimi Lhamo’s land through deception.

Karma Wangchuk availed a personal loan amounting to Nu. 370,000. The employer’s undertaking letter was executed on 30/3/2016 which was one-year before sanction, indicating that the undertaking letter was for previous loans.

Sanction letter dated 28/4/2017 was not approved by the Manager or Officiating Manager. The disbursement memo and loan appraising form was prepared by Kinley, Teller, without approval from the Approving authority. Loan agreement signed by borrower, Karma Wangchuk, and as a witness signed by Kinley also the appraising officer for this loan, without being signed by the Manager.

The CIB report dated 28/4/2017 attached with the loan document shows two NPL account in the name of Karma Wangchuk.

These circumstances suggest that there were collusions and circumvention of the Standard Operating Procedures in availing the loans.

Two housing loans of Nu. 1 mn were sanctioned without appropriate documents for construction/maintenance of houses. The clients had informed the RAA that the loans were availed for Chenga Dawa (third party). It was evident that Karma Wangchuk, as a credit assistant had circumvented the process to avail loans on behalf of a third party. The loans are currently under NPL.

Agriculture and Animal Husbandry loans of Nu 500,000 were sanctioned to Ludra Bdr Ghishing from Bayathang Village under Khebesa Gewog, Dagana.

 The loans were sanctioned using collateral security from other closed loan documents. Chokey Dema, one of the owners had litigated for mortgaging her land without her consent.

The Credit Assistant had made an internal agreement with the client to pay the installments and interest by him.

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