NRB amends directives, holds banks accountable for money laundering

Kathmandu, October 3 — The central bank can now take action against officials and employees of banks and financial institutions involved in money laundering. This provision has been established by amending the unified directive issued to banks and financial institutions.

The directive stipulates that if any bank or financial institution is penalized for money laundering, the employees involved must be prosecuted according to the law. If such action is not taken, the central bank has indicated that it will impose fines ranging from 1 million to 5 million Nepali Rupees, remove officials from their positions, or impose both types of penalties.

Additionally, the directive requires banks and financial institutions to prepare an annual report, including a review of actions taken throughout the year regarding money laundering, terrorist activities, and the financing and expansion of weapons of mass destruction. This report must be submitted to the Money Laundering Prevention Supervision Division within two months of the end of the fiscal year. For the current fiscal year, this report must be submitted by mid-December, 2024.

Institutional account operations relaxed

The central bank has relaxed the procedures for opening accounts for organized institutions and companies in banks and financial institutions. The Nepal Rastra Bank has simplified the documentation and processes required for opening accounts.

Previously, when opening or updating accounts, only the personal and family details (KYC) of shareholders with a 10% or greater stake in the company were required. This requirement has been amended to include shareholders with a 15% or greater stake.