Surge in suspicious financial transactions reported by NRB


Kathmandu: Nepal Rastra Bank (NRB) has sounded alarm bells over a significant rise in suspicious financial transactions across the country’s banks and financial institutions (BFIs). According to records from NRB’s Financial Investigation Unit (FIU), these transactions surged by a staggering 57 percent in 2023 alone, reaching a total of 6,255 cases amounting to approximately Rs 40 billion.

The FIU’s latest report highlights a concerning trend, noting that the number of dubious transactions has been steadily climbing over the past four years. In 2020, there were 1,103 reported cases, which escalated to 1,854 cases in 2021—an increase of 68 percent. By 2022, the figure more than doubled to 3,979 cases, setting the stage for the substantial spike observed in 2023.

Under NRB regulations, all BFIs, money-changers, remitters, cooperatives, insurance companies, securities businesses, and other designated non-financial entities are mandated to promptly report any suspicious financial activities to the FIU. This includes transactions suspected of involvement in fraud, terrorist financing, money laundering, and other illicit activities.

In 2023, the FIU found that BFIs accounted for the largest share of suspicious transactions, totaling 5,282 cases valued at Rs 38.72 billion. Development banks, stock brokerage firms, finance companies, remittance services, and life insurers were also flagged for handling significant amounts linked to suspicious activities.

According to FIU data, a notable portion—51.14 percent—of these transactions were associated with potential money laundering activities, prompting heightened scrutiny and investigation procedures. Keshav Prasad Rimal, deputy director of the FIU, confirmed that investigations are underway, with cases slated for referral to appropriate authorities including Nepal Police’s Central Bureau of Investigation.

The alarming rise in suspicious transactions underscores growing concerns about financial integrity and compliance with anti-money laundering protocols within Nepal’s financial sector. Regulatory bodies continue to emphasize vigilance and strict adherence to reporting guidelines to combat illicit financial activities effectively.