Dubious transactions surge by 24 percent, NRB reports

KATHMANDU, MARCH 31:  The suspicious transactions/activities have increased by approximately 24 per cent, according to the annual report for the last fiscal year published by the Financial Information Unit of Nepal Rastra Bank (NRB). The report states that while there were 5,935 such transactions in the previous fiscal year (2022/23), the number rose to 7,338 in 2023/24.

According to the central bank, the dubious transactions are related to tax evasion, financial crimes involving banking, foreign exchange, insurance, and cooperatives, as well as scams, lotteries, gambling, and betting, among other offenses.

Under the Asset Laundering (Money Laundering) Prevention Act, 2008, which aims to prevent money laundering and terrorist financing, the number of reporting entities registered in the Unit’s goAML system—including financial institutions, law enforcement agencies, investigative bodies, and regulatory authorities—has reached 1,639.

The number of threshold transactions reported by these institutions stood at 1,698,398 in 2022/23 but slightly decreased to 1,697,712 in 2023/24. However, the number of suspicious transactions and activities reported saw a 34 percent increase compared to the previous year.

The report indicates that 1,632 cases were analyzed in the last fiscal. Of these, 889 reports were forwarded to law enforcement and investigative agencies for further inquiry or regulatory action, while 746 reports were archived by the Unit, pending further information for possible re-analysis.

In 2023, Nepal underwent its third round of Mutual Evaluation and entered a one-year observation period under the Financial Action Task Force for enhanced monitoring. The report highlights Nepal’s ongoing efforts to comply with the task force’s requirements and implement a time-bound action plan to exit the grey list.

The report also outlines national and international coordination efforts undertaken by the Unit to prevent money laundering and terrorist financing. Additionally, it details various capacity-building programs designed for its staff, regulatory bodies, and reporting institutions.

Furthermore, it sheds light on common money laundering and financial crime methods observed in Nepal, including hundi (informal remittance), cyber fraud, illegal online gambling, the use of virtual assets, tax evasion, corruption, and trade-based money laundering through imports and exports.