Election Commission Approves Directive Mandating Separate Bank Accounts for Campaign Finance Transparency

Kathmandu. The Election Commission (EC) has approved the 'House of Representatives Election Publicity-Promotion Bank Account (Operation and Management) Working Procedure, 2082' to make election expenditure transparent and economical. The procedure, approved by the EC on Tuesday, is reportedly introduced with the aim of controlling, monitoring, and disciplining the publicity expenditure incurred by political parties and candidates in the House of Representatives elections.

According to the procedure, political parties and candidates must mandatorily open a separate bank account for election publicity. For this, political parties must apply to the EC Secretariat, and candidates to the respective election office in the prescribed format. Along with the application, they must submit the party's official letter, the candidate's nomination certificate or identity card, the relevant bank's signature specimen card, and the account operator's citizenship certificate.

Banks and financial institutions will open the account only after the EC or the election office verifies the documents and provides a recommendation. Information about the account opening must be mandatorily provided to the EC, the election office, and the Office of the Financial Comptroller General (FCGO).

As per the procedure, for political parties, the account can only be operated with the joint signatures of a maximum of two office bearers designated by the party. For candidates, the account can be operated with the single or joint signatures of the candidate themselves or a person authorized by them, up to a maximum of two persons. Furthermore, the procedure stipulates that all income and expenditure related to election publicity and promotion must be conducted in Nepali currency.

All voluntary financial contributions, expenditure incurred during publicity, and payments made via check, draft, TT, or electronic means must be routed through the bank account.

Political parties and candidates are prohibited from accepting cash contributions exceeding NPR 25,000. Such amounts must be deposited directly into the bank account. For amounts less than NPR 25,000, a system is in place where cash can be deposited after issuing a cash receipt or voucher.

The procedure strictly prohibits accepting financial contributions from bodies and individuals forbidden under the Political Parties Act, 2073. Accepting contributions from the Government of Nepal, provincial and local level bodies, government-owned or controlled entities, public limited companies with public shares, government or community educational institutions, national and international non-governmental organizations, foreign governments or individuals, unidentified persons or entities, and other entities specified by the EC is completely prohibited.

The procedure mandates that for contributions exceeding NPR 100,000, the name, address, profession, Permanent Account Number (PAN), source of funds, and tax-related details of the contributing person or entity must be compulsorily disclosed.

Funds held in bank accounts opened prior to the implementation of this procedure for election expenditure must be transferred to the account opened under the new procedure. The procedure states, "Political parties or candidates must transfer the funds received by opening a bank account for the purpose of election publicity before the implementation of this procedure to the bank account opened in accordance with this procedure."

After the election is concluded, parties and candidates must publicize the details of their election publicity expenditure and submit them to the respective election office. The bank account will be ordered to be closed within 35 days of the preparation of that report, but the account details must be preserved for six years. If a party is dissolved or a candidacy is canceled, the EC can order the account to be closed at any time.

The procedure assigns the responsibility for monitoring the expenditure of political parties and candidates in the election to the Chief of the Office of the Financial Comptroller General (FCGO). The FCGO Chief will monitor this as the Election Code of Conduct Monitoring Officer. The monitoring will collect detailed information, including the misuse of government employees or public property, whether prohibited entities provided support, whether expenditure limits were exceeded, and whether expenditure was made on prohibited activities.

The bank account documents and details are considered confidential and inviolable according to prevailing laws, but a clear provision has been kept that the Election Commission or an officer authorized by the Commission can inspect or audit the account if deemed necessary.

Serious questions have been raised in previous elections regarding the source, amount, and use of publicity expenditure. Opaque transactions in the name of voluntary contributions, cash expenditures, the practice of accepting support from prohibited entities, and the tendency to exceed expenditure limits have added challenges to the fairness and good governance of elections. In this context, the EC stated that this procedure has been implemented to effectively enforce Section 16 of the Election Code of Conduct, 2082, and to make the elections systematic and dignified.