Bankers and directors of financial institution have said that they are living in fear following the arrest of Nepal Investment Mega Bank CEO Jyoti Prakash Pandey. 

Speaking at a press conference organized by Confederation of Banks and Financial Institutions Nepal on Thursday, CBIFIN President Prachanda Bahadur Shrestha said the arrest of bankers has created fear across the financial sector.

"Who is not afraid when bankers are being arrested everyday?" Shresrha said. 

Saying that the banks have first right over loan collateral, Shrestha said that the current arrests have created serious psychological fear among bankers. 

Also speaking at the program, senior Vice President of the CBIFIN Rajesh Upadhyay said that everyone is now in a state of fear, affecting the credit investment. 

Although loans are currently available at low interest rates, credit investment is not expanding due to the migration of young people abroad and low confidence of the businessmen. 

Similarly, CBIFIN General Secretary Manoj Kumar Goyal said that poor market management has created a problem in direct lending, including agriculture.  

A team of Central Investigation Bureau (CIB) of Nepal Police arrested Pandey on Tuesday on allegations that NIMB illegally auctioned assets pledged by Smart Telecom with the intention of depriving the government of its claim. 

The bank, however, has insisted that it merely exercised its legal right to recover loans backed by collateral.