A leading Indian bank's joint venture in Nepal caved in to an extortionist who walked away with Nepalese Rs.3 million in broad daylight from a branch close to the army barracks.

The Everest Bank Limited (EBL), started as a joint venture (JV) between India's Punjab National Bank (PNB) and Nepalese entrepreneurs 11 years ago, is considered one of the leading private banks of Nepal.

EBL has now hit the headlines for extortion. An unarmed young man walked into the manager's office at the New Road branch Tuesday morning, claimed he was a Maoist leader, and reportedly asked for Rs.150 million as "donation" to his banned organisation.

The intruder, who reportedly wore a black suit and glasses, appeared to be in his mid-20s. He was alone and showed no firearms to the employees though he reportedly pretended to be carrying a gun in his pocket.

The man, who gave his name as Gaurav, described himself as the chief of the communist insurgents in Kathmandu Valley. He reportedly threatened bank manager Raghunath Pradhan that he would blow up the branch at New Road, the upmarket shopping centre of the city, if his demand was spurned.

The bank manager reportedly told him the bank did not have so much cash and gave him Rs.3 million, which the intruder stashed away in a leather bank and walked away.

Though the man was in the bank for nearly three hours, the manager did not raise an alarm. It was only around 4 p.m. that the police were informed. Police detained Pradhan for questioning and released him Tuesday.

PNB holds 20 percent of the equity in EBL and its officials manage the Nepalese JV under a technical services agreement. EBL recently had a branch inaugurated in Pokhara city by Indian Ambassador Shiv Shankar Mukherjee.

The extortion incident comes within a fortnight of a leading Nepalese businessman, Shekhar Golcha, reportedly paying an extortionist following a similar method of operation.

An unarmed man claiming to be a Maoist walked into the industrialist's office and asked for a massive "donation". Golcha reportedly managed to scale down the demand and paid him an unspecified amount.

Security authorities had earlier this year summoned several leading businessmen and asked them not to give in to extortion bids by Maoists or people posing as Maoists.

Last year, after the Maoists targeted two leading India-Nepal joint ventures for extortion bids - Dabur Nepal and Surya Nepal, an ITC JV - Shyam Saran, who was then the Indian ambassador to Nepal and is now India's foreign secretary, had urged the Indian business community to resist such demands and bring such bids to the embassy's notice.

He had also asked the Nepalese government to provide security to threatened business houses.

Nepalese security forces claim the law and order situation has improved considerably since King Gyanendra took power forcibly in February with the help of the army. However, business houses continue to reel under Maoist threats, much of which go unreported.