Nepal Rastra Bank (NRB) says there has been a whopping rise in suspicious financial transactions through Nepal’s banks and financial institutions (BFIs).
The records maintained by the Financial Investigation Unit (FIU) of the NRB show the suspicious transactions surged by 57 percent in 2023. There were 6,255 such transactions worth around Rs 40 billion in the review year.
The number of doubtful transactions has been increasing significantly in the last four years. According to a report of the FIU, a total of 1,103 cases of suspicious transactions were recorded in 2020.
The figure jumped to 1,854 cases in 2021, a rise of 68 percent. Similarly, the FIU recorded 3,979 cases of such transactions in 2022, which was more than double of the figure in 2021.
According to the NRB rules, all the BFIs, money-changers and remitters, cooperatives, insurance companies, and securities business persons and designated non-financial businesses and professionals such as dealers of precious stones and metals, casinos, independent accountants and legal professionals, notary public, trust and company service providers are required to report any suspicious transaction to the FIU.
Similarly, government agencies like the Company Registrar’s Office, Land Revenue Offices and Department of Customs, among others, are also legally obliged to report suspicious transactions to the FIU.
Suspicious transaction reporting involves detailed information about transactions that provide necessary evidence to the FIU to identify individuals, groups and organizations involved in fraud, terrorist financing, money laundering and other crimes. The BFIs are mandated to report to the central bank’s designated body no later than three working days after detection of the initial suspicion.
The FIU report shows that BFIs were found to have carried out the largest volume of the suspicious transactions in 2023. In terms of money value, the BFIs carried out 5,282 cases of such transactions worth Rs 38.72 billion in the review period.
Likewise, development banks handled 330 cases of doubtful transactions worth Rs 4.72 billion. The stock brokerage companies conducted 62 of such transactions worth Rs 4.29 billion. Finance companies handled 99 cases amounting to Rs 2.65 billion, remittance companies handled 156 cases amounting to Rs 1.11 billion and life insurers faced 26 suspicious transactions worth Rs 362.6 million.
Similarly, two suspicious cases of Rs 4 billion through cooperatives, a single case of Rs 4 billion through a merchant bank and 24 cases of Rs 20 million were done through microfinance.
According to the FIU, 51.14 percent of the suspicious financial transactions were related to money laundering. A total of 3,199 cases were registered under money laundering in the review year.
According to the NRB, the FIU will carry out investigations against the registered cases. “The cases will be then forwarded to related authorities including the Central Bureau of Investigation of Nepal Police,” said Keshav Prasad Rimal, deputy director of the FIU.
