KATHMANDU: Jhapa District Court has issued a verdict ordering commercial banks and financial institutions to release a loan amounting to Rs 6.5 billion (Rs 65 crore) to businessman Durga Prasai, citing prior contractual obligations.

A single bench of Judge Lok Bahadur Hamal ruled that the lenders must honor the loan agreement made with Eastern Cancer Hospital Pvt. Ltd., stating that the agreed financing had not been disbursed despite contractual commitments.

Prasai had signed loan agreements with Kumari Bank on April 8, 2019, along with additional arrangements involving Prabhu Bank, Global IME Bank, and Goodwill Finance.

According to the case details, there was also a preliminary agreement in 2023 for further lending support.

The dispute arose after the banks allegedly withheld the disbursement of funds, prompting Prasai to file a lawsuit seeking enforcement of the loan agreements.

In its decision, the court directed that the loan be provided for the purchase of medical equipment for Eastern Cancer Hospital and for working capital purposes as originally agreed.

Prasai had later become widely known for leading the “Nation, Nationality, Religion, Culture and Citizen Protection Campaign,” during which he publicly criticized banking institutions and called for loan waivers for struggling borrowers. His activism sparked controversy and was followed by tensions between financial institutions and borrowers.