Banking Offense and Punishment Act 2064 Nepal Explained

The Banking Offense and Punishment Act, 2064 (2008) is a key legislative framework enacted in Nepal to regulate and address criminal activities within the banking and financial sector. The primary objective of the Act is to ensure integrity, transparency, and accountability in financial transactions while safeguarding the interests of depositors, institutions, and the overall financial system. As Nepal’s banking industry has rapidly expanded, so has the risk of financial crimes, including cheque bounce, fraud, embezzlement, misuse of authority, and illegal financial transactions. To curb these practices, this Act provides clear definitions of banking offenses and lays out corresponding legal procedures and penalties.

The Act empowers the judiciary and relevant regulatory bodies like the Nepal Rastra Bank to investigate and prosecute offenses efficiently. It ensures that those involved in banking crimes face proportionate punishment such as fines, imprisonment, or both, depending on the severity of the offense. Additionally, it facilitates swift resolution through specialized benches in the courts, which helps in timely justice delivery. Overall, the Banking Offense and Punishment Act plays a crucial role in strengthening the credibility of Nepal’s financial system, promoting investor confidence, and maintaining discipline in the banking sector.

Crimes as mentioned in the Banking Offenses and Punishment Act 2064

a) Not to open an account or demand cash payment in an unauthorized manner:

While opening an account with a bank or financial institution or demanding cash payment, no one shall undertake the following acts:

• Open or knowingly allow to open an account by submitting false documents,
• Open or allow to open an account in the name of a fictitious or other person or organization, except otherwise permitted by the laws.
• Draw a cheque to obtain or to knowingly make payment from an account where he/she has apparent knowledge that the account does not have sufficient balance to cover the amount of the cheque drawn.

b) Not to obtain or issue cheques, cheque-books, or bank statements in an unauthorized manner:

The provision prohibits individuals from unlawfully acquiring or attempting to acquire someone else's cheque, cheque-book, or account statement by deceit, impersonation, or any misleading means. It also restricts anyone from providing such banking documents to another person or institution without the written consent of the account holder. These rules are intended to protect personal banking information and prevent financial fraud or misuse of banking instruments.

c) Not to make unauthorized withdrawals or payments:

No one shall do the following acts while withdrawing or making payment from an account maintained with a bank or financial institution,

• Withdraw money, in an unauthorized manner, from other person's account,
• Withdraw money by stealing a cheque held by other person or by obtaining the same in any other manner,
• Transfer funds in an unauthorized manner, from the customer's account or make unauthorized payments.
• Obtain or make cash payment by getting any sort of fake or other person's bills of exchange, cheque, draft, or other similar instruments in an unauthorized manner.

d) Not to obtain or make payment by way of abuse or unauthorized use of electronic means.

No one shall obtain or make payment by way of abuse or unauthorized use of a credit card, debit card, automated teller machine(ATM) card, or other electronic means.

e) Not to avail or provide loans in an unauthorized manner:

No one shall commit the following acts while availing or providing loans from a bank or financial institution

• Avail or provide loans by submitting a false, fake, or unreal financial statement or by creating an artificial business.
• Avail or provide over loans by way of unnatural overvaluation of collateral security.
• Avail or provide loans by way of unnaturally hiking the project cost based on false details.
• Avail or provide credit, facility, or discounts beyond the authority obtained or limit sanctioned.
• Re avail or re-provide loans from or by other Bank or Financial Institutions without having a due release of the collateral security once provided to a Bank or Financial Institution or more than the amount covered by the collateral security against the same collateral security.
• Extend credit more than the requirement compared to the customer's business transaction.
• Accept or provide any sort of undue benefit in return for granting credit facility.

f) Not to misuse credit:

No one shall misuse the credit facilities availed from a bank or financial institution or let the same be misused by diverting in the purpose other than for which the credit facilities were availed.

g) Not to misuse banking resources, means, and assets:

The Promoter, Director, a shareholder who is deemed to have a financial interest under the prevailing laws, Chief Executive Officer, employee, advisor, Managing Agent or associated person or organization or family member or close relatives of such persons shall not misuse the resources of a bank or financial institution by availing a credit or facility or in any other manner. No one shall commit any financial irregularity, whiling auctioning selling the non-banking assets or other assets of a bank or financial institution or doing any other transactions.

Banking Offense Lawyer in Nepal

At Alpine Law Associates, we specialize in providing expert legal services for all matters related to banking offenses in Nepal. As a fully registered, full-service law firm in Nepal, we have an in-depth understanding of the Banking Offense and Punishment Act, 2064 (2008), and other associated financial laws. Whether you are an individual wrongfully accused, a bank or financial institution seeking recovery, or a business navigating complex banking regulations, our experienced legal team is here to guide you through every legal step with clarity and precision.

Our services cover a wide range of banking-related legal issues, including cheque bounce cases, fraudulent loan recovery, misuse of banking instruments, unauthorized withdrawals, digital banking fraud, and regulatory compliance. We represent clients at all stages—from investigation, pre-trial consultations, defense strategy, and court proceedings, to appeal processes if required. Alpine Law Associates also offers proactive legal consultancy to help businesses and banking professionals operate within the law and prevent potential liabilities.

With Alpine Law Associates, you can expect personalized attention, swift action, and robust representation. We are committed to upholding financial justice, safeguarding your legal rights, and ensuring accountability within Nepal’s financial sector. Trust our team for discreet, professional, and outcome-focused legal services in banking offense matters.

Conclusion

In conclusion, the Banking Offense and Punishment Act, 2064 (2008) serves as a vital legal tool to combat financial crimes and uphold discipline within Nepal’s growing banking sector. By clearly defining offenses such as unauthorized account operations, misuse of cheques, electronic fraud, and illegal loan practices, the Act aims to ensure transparency, accountability, and integrity in financial transactions. It empowers regulatory authorities and the judiciary to take swift and proportionate action against offenders, thereby safeguarding the interests of depositors and maintaining trust in the financial system. Ultimately, the Act strengthens financial governance and promotes sustainable banking practices in Nepal.