The Nepal Insurance Authority (NIA) has instructed all entities engaged in insurance transactions to adopt compulsory electronic payment systems in a bid to boost financial transparency and curb money laundering.
In circulars issued to life and non-life insurers, microinsurance and reinsurance companies, as well as insurance brokers, the regulator directed that every transaction be carried out through the bank accounts of the concerned individuals or institutions. The directive takes effect on January 15.
According to the NIA, the decision is in line with the Money (Asset) Laundering Prevention Rules, 2025. Under these provisions, insurers must deposit claim settlements directly into the bank account of the beneficiary, in accordance with policy terms or prevailing laws.
The authority also noted that most government agencies have already shifted to fully digital payment systems via banking channels for all types of transactions.
Previously, the NIA had mandated that insurers pay salaries, benefits and related employee payments solely through bank accounts. The latest directive seeks to expand non-cash transactions, minimize money laundering risks, enhance financial transparency and promote digital payment usage.
This policy move coincides with ongoing government efforts to remove Nepal from the Financial Action Task Force (FATF) “grey list,” where the country has remained since February 2025. Under FATF obligations, Nepal was expected to complete a National Risk Assessment Report by mid-November 2025, but several sector-specific reports required for completion are still pending.
