Nepal, July 20 -- Nepal Rastra Bank (NRB) has come under fire for its weak role in supervision and monitoring of the banks and financial institutions (BFIs) following the case of crisis-ridden Karnali Development Bank Limited (KDBL).

The central bank's role as the regulator of the BFIs has been put into question after the Central Investigation Bureau (CIB) of Nepal Police on Wednesday arrested Bhuwan Basnet, a former senior official of the NRB, on charges of manipulating the financial status of the KDBL. The CIB, during its investigation, found that Basnet, who had been delegated the authority to study over the poor financial health of the KDBL, submitted a fake report by hiding the actual condition of the development bank.

The CIB inv...