Strict Enforcement on Money Laundering: Nepal Rastra Bank Implements New Rules with Fines

Nepal Rastra Bank (NRB) has tightened regulations to prevent money laundering by amending the Integrated Directive 2080. According to this directive, banks and financial institutions found violating anti-money laundering laws will face fines ranging from NPR 1 million to NPR 50 million.

Penalties and Enforcement:

• If any bank or financial institution is found to have officers or employees involved in money laundering violations, those individuals will be subject to legal action under prevailing laws.

• If a bank fails to take action against such employees, NRB itself can impose penalties or take disciplinary measures against the officers or employees involved.

• Fines range from NPR 1 million to NPR 50 million.

• In severe cases, the guilty party may be removed from their position or face both penalties and dismissal.

Shareholder Information:

• Banks are now required to collect details of shareholders owning 15% or more of a company, replacing the previous threshold of 10%.

• For legal entities (companies or institutions), banks must gather personal details of shareholders holding 15% or more ownership. These details must include their name, surname, names of family members, address, phone number, mobile number, and email address.

New Department Formation:

• A new Money Laundering Prevention Supervision Department has been established, with delegated authority from various departments.

• NRB has taken strong steps to combat money laundering and terrorist financing, making it necessary for banks and financial institutions to tighten their internal monitoring systems.

These new measures highlight NRB's commitment to strengthening oversight and enforcing strict penalties to curb money laundering activities in the financial sector.