The Commission initiated this investigation based on a report filed by the Druk PNB Bank Ltd. wherein one of its employees responsible for refilling ATM machines was alleged to have embezzled cash of Nu. 10.552 million. The fraud came to light when the Bank conducted physical verification of cash inside all of its nine ATMs placed in and around Thimphu on 22 April 2017 after experiencing frequent customer complaints and unusual rate at which the machines were running out of cash. These experiences followed after the Branch Head unwittingly curtailed its normal replenishment amount for each ATM machine from Nu. 3.100 million to just Nu. 1.600 million. As a result, the accused was unable to manipulate the physical cash balance in ATMs and hence leading to a few ATMs becoming out of service. The accused was eventually compelled to confess to the Branch Head.
The investigation revealed that the accused had started his embezzlement scheme as early as 2013 while he was entrusted with the responsibility of replenishing all nine ATMs in Thimphu. As part of its business practice, the Bank used to replenish each ATM (irrespective of its location) with Nu. 3.100 million cash every time the system balance ran below Nu. 1.000 million. In every refilling, any cash balance lying inside the ATM from the previous refill had to be removed and returned to the Head Cashier. So, theoretically, the cash balance in the ATMs never went below Nu. 1.000 million. To this, the accused soon saw a window of opportunity to play around with the cash balance. He short-loaded ATMs since the ATMs cannot auto read physical cash balance. He targeted machines located in areas that were less frequented by customers. The accused did not show any physical cash shortages in ATMs during reconciliations of ATM cash transactions and concealed the embezzlement of ATM cash from the Bank management. On record, the physical cash balance with system balance every time he replenished the ATMs. The investigation also learned that at least two other bank officials acted in complicit with him in concealing the fraud since they were also to certain extent involved in adjustment of cash shortage in the bank vault using the cash from ATMs.
The Commission forwarded the case to OAG on 10 September 2017 for prosecution recommending charges against 8 individuals.