Bill registered to effectively deal with banking offenses: FinMin

KATHMANDU, AUGUST 25: Finance Minister Bishnu Prasad Paudel has announced that the Bill to amend the Banking Offence and Punishment Act of 2064 BS has been registered in Parliament. This came amidst reports of rising banking fraud, including cheque fraud.

In his address to a meeting of the Finance Committee in the House of Representatives (HoR) today, he stated that the Bill aims to make the investigation, prosecution, and punishment of banking offences, including cases of cheque bouncing, more systematic and effective.

During the meeting, lawmaker Dr. Swarnim Wagle proposed prioritizing fines instead of jail sentences in cases of banking fraud. He noted that such provisions are common in global practices and emphasized the need to pass the Bill soon.
Another lawmaker, Padam Giri, criticized the negligible legislative role of Parliament, which has led to the pending status of numerous bills in the Committee.

The Bill was initially registered by the then-Finance Minister, Dr. Prakash Sharan Mahat, on September 2, 2023.
It is said that the government recognized the need to amend the Act due to the necessity of different legal treatment for cases of cheque bouncing, the Supreme Court's order to maintain uniformity in the legal approach to such cases, and the assessment of the Office of the Attorney General.

The Bill proposes that if an account holder does not have sufficient funds in the bank for payment as demanded by a cheque, the cheque should be returned to the bearer.
If the bearer wishes to prove it as a case of cheque bouncing, the respective bank should inform the account holder to ensure that sufficient funds are deposited for payment as demanded by the cheque within 30 days.

The Bill also mandates that any account holder should not issue a cheque requesting payment exceeding the available balance.
The procedures to establish a case of cheque bouncing will be initiated if the required amount is not deposited in the bank within the next 30 days.

The existing Banking Offence and Punishment Act includes provisions for fines and imprisonment of up to three months if a cheque bounces. However, the proposed Bill includes a provision requiring the issuer of a bounced cheque to pay five percent of the due amount as a fine to the cheque bearer, along with imprisonment based on the amount mentioned in the cheque.

In cases where the due amount is up to Rs 500,000, imprisonment of up to one month has been proposed. For amounts ranging from Rs 1 million to Rs 5 million, imprisonment of up to six months has been proposed, and for amounts over Rs 5 million, imprisonment of up to two years has been proposed.
The Bill also proposes that a case of cheque bouncing can be registered at the respective District Court within three months if the cheque bounce is proven.