Banking Offence and Punishment Act 2064 in Nepal (2026)
A 2026 practitioner's guide to the Banking Offence and Punishment Act 2064 (2008) and the 2073 amendment — the...
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The first question every accused person and every victim's family asks at our office is the same — "what is the punishment going to be?" The answer is rarely a single number. The Penal Code 2074 lays out a menu of seven distinct sanctions, each with its own purpose, and the trial court chooses among them after weighing the gravity of the offence, the offender's mental state, the harm to the victim, and a long list of mitigating and aggravating factors set out in the Code itself. Understanding that menu — and how the court moves between its options — is the difference between informed expectations and false hope.
Nepal's modern punishment framework lives in two statutes that work together. The National Penal (Code) Act 2017 — the Muluki Apraadh Sanhita 2074 — defines each offence and prescribes the available sentence. The Criminal Offences (Sentencing and Execution) Act 2074 governs how the trial court fixes the actual term within the prescribed band, how the sentence is executed in custody, and the rules on suspended sentences, probation, and remission. The framework replaced the old General Code on 17 August 2018 and represents Nepal's first codified, modern sentencing regime.
This guide explains the seven types of punishment recognised in Section 40 of the Penal Code, what life imprisonment actually means in practical years, why Nepal does not impose the death penalty, why confiscation of property is no longer available as a punishment, and how the court chooses between imprisonment, fine, compensation and community service in any given case.
The punishment system in Nepal is set out in Section 40 of the National Penal Code 2074. Seven types of punishment are recognised: (1) imprisonment for life, (2) imprisonment for a fixed term, (3) fine, (4) imprisonment and fine combined, (5) compensation to the victim, (6) imprisonment in default of fine or compensation, and (7) community service in lieu of imprisonment. Life imprisonment is generally treated as a 25-year term, except for the gravest offences (cruel murder, aircraft-related murder, kidnapping with murder, mass-poisoning, genocide, murder with rape) where it means the offender's entire remaining natural life. The death penalty is abolished — Article 16(2) of the Constitution of Nepal 2072 (2015) provides that no law shall be made imposing the sentence of death, and the constitutional abolition has been in place since 1990. Confiscation of property is no longer permitted as a stand-alone punishment under the 2074 Code. Sentencing within the prescribed band is governed by the Criminal Offences (Sentencing and Execution) Act 2074, which also regulates suspended sentences, probation, juvenile sentencing and remission.
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Our criminal law team represents accused persons at every stage where the punishment outcome is decided — bail at the District Court, the trial on the charge-sheet, sentencing arguments under the Sentencing Act 2074, and appeal to the High Court on conviction or on sentence severity. The cases that produce the worst sentencing outcomes are those where the defence ignores the mitigating-factor catalogue in Section 39 of the Penal Code, fails to plead community service or a suspended sentence where the law allows it, or treats sentencing as an afterthought to the conviction argument. A well-prepared sentencing submission can move an accused down the menu by an entire tier.
Section 40 of the Penal Code 2074 fixes the closed list of sanctions a Nepali criminal court may impose. The court cannot invent a punishment outside this list — for example, no court can order public flogging, banishment, or property confiscation as a stand-alone punishment, because none of those sit within Section 40. The seven recognised types are:
The Code does not carry confiscation of property as a stand-alone punishment in this list. Forfeiture of the specific instrumentality of the offence — the weapon used in a homicide, the vehicle used in a kidnapping, the proceeds of a theft — is dealt with as ancillary relief under the procedural code and the Special Acts, not as a Section 40 punishment. Confiscation of the offender's general estate, common in older legal systems, is not permitted under the 2074 Code.
This is the question that decides almost every Section 177 and Section 178 homicide outcome, and the answer is two-tiered. Under the Sentencing Act 2074, life imprisonment is generally treated as a fixed term of 25 years served in custody. For the gravest categories of offence, however, life imprisonment means the offender's entire remaining natural life, with no automatic release at the 25-year mark.
The "whole life" tier covers a closed list of the most serious cases — murder committed with cruelty or torture, murder committed by hijacking or sabotaging an aircraft, murder committed in the course of kidnapping or hostage-taking, mass-poisoning of public food or drinking water that causes multiple deaths, genocide, and the offence of murder coupled with rape. For all other Section 177 and Section 178 convictions, the 25-year standard applies and the actual time served is then adjusted by the remission rules in the Sentencing Act 2074.
The practical effect is that two convicts sentenced on the same day to "imprisonment for life" can serve very different terms in custody — the convict whose case sits in the whole-life category will not be released, while the convict whose case sits in the standard category serves 25 years subject to remission. This is why the sentencing arguments in a homicide case have to engage with the Section 39 mitigating factors and with the Sentencing Act categories, not just with the conviction question. For the broader analytical framework, our guide to the theories of punishment explains how rehabilitation, deterrence and retribution are mixed in Nepal's sentencing practice.
Nepal abolished capital punishment by constitutional amendment in 1990 and the prohibition has been carried forward in every subsequent constitution. The current Constitution of Nepal 2072 (2015) puts the abolition into a fundamental right at Article 16, which guarantees the right to live with dignity and provides that no law shall be made imposing the sentence of death. The Article 16(2) prohibition is constitutional in form — Parliament cannot reintroduce the death penalty by ordinary legislation; it would require a constitutional amendment.
The consequence for the punishment menu is that the Penal Code 2074 stops at imprisonment for life. Even for the gravest categories of offence — premeditated mass murder, aggravated terrorism, treason, war crimes — the maximum sanction available to a Nepali court is whole-life imprisonment. The abolition is also relevant to extradition cases: where a foreign State seeks the surrender of a person on a charge that would carry the death penalty in the requesting State, Nepal's constitutional position is that surrender on death-eligible charges is incompatible with Article 16(2).
For the historical and theoretical context behind the abolition decision, our guide to the National Penal Code 2074 explains the legislative shift from the old General Code to the modern codified regime, and our companion piece on homicide laws in Nepal sets out exactly which homicide categories now attract the heaviest available sentence — life imprisonment under Sections 177 and 178.
The Code does not let the trial court pick from the menu freely. Each offence comes with a prescribed sanction or set of sanctions — Section 177 prescribes life imprisonment; Section 181 prescribes 3 to 10 years and a fine of NPR 30,000 to 100,000; a public-order offence may prescribe imprisonment up to one year, a fine up to NPR 10,000, or both. The court's discretion is exercised within that prescribed band, not over the whole menu.
Within the band, the Sentencing Act 2074 directs the court to consider the gravity of the offence, the harm to the victim, the offender's mental state and motive, the offender's age and antecedents, the catalogue of mitigating factors at Section 39 of the Penal Code (offender below 18 or above 75, no prior record, voluntary confession, surrender, agreement to compensate the victim, diminished capacity, instigation by another, insignificant harm), and the catalogue of aggravating factors that weigh against leniency. Once the term and the fine are fixed, the court then considers whether the case is suitable for a suspended sentence, probation, or community service in lieu of imprisonment.
Community service is the most under-used option in current sentencing practice. The Sentencing Act 2074 makes it available for offences carrying short imprisonment terms where the offender is a first-time offender, the harm to the victim has been compensated or is being compensated, and the offender consents to the community-service order. It is the right outcome in many low-tier negligence and accidental-injury cases — and it is rarely awarded simply because the defence does not press for it. A sentencing submission that opens with the Section 39 mitigating factors and closes with a community-service prayer changes the outcome in cases where the prosecution's headline argument is incarceration.
The compensation order under the fifth item of the menu is mandatory in offences against the person and against property — the trial court must consider compensation for the victim's harm, injury or loss in the same judgment that records the conviction. The order is enforceable as a money decree, which means the victim does not need to file a separate civil suit. Where the offender does not pay, the default-imprisonment provision converts the unpaid sum into a capped custodial term under the Sentencing Act 2074.
Last reviewed: April 2026
Section 40 of the National Penal Code 2074 recognises seven types of punishment — imprisonment for life, imprisonment for a fixed term, fine, imprisonment and fine combined, compensation to the victim, imprisonment in default of unpaid fine or compensation, and community service in lieu of imprisonment. The court must choose its sanction from this closed list within the band prescribed for the specific offence. Confiscation of property is not a stand-alone punishment under the 2074 Code.
Life imprisonment under the Criminal Offences (Sentencing and Execution) Act 2074 is generally treated as a 25-year term in custody. For the gravest categories of offence — cruel murder, murder by aircraft hijacking, murder during kidnapping, mass-poisoning, genocide, and murder coupled with rape — life imprisonment means the offender's entire remaining natural life with no automatic release at 25 years. Remission and conditional release are governed by the Sentencing Act 2074.
No. The death penalty is abolished. Article 16(2) of the Constitution of Nepal 2072 (2015) provides that no law shall be made imposing the sentence of death. The constitutional abolition has been in place since 1990 and has been carried forward in every subsequent constitution. The maximum punishment available to any Nepali court under the Penal Code 2074 is therefore imprisonment for life — there is no offence in Nepal for which a court may impose the death penalty.
Where the trial court imposes a fine and the convict does not pay, the court orders imprisonment in default of payment. This is the sixth type of punishment recognised in Section 40 of the Penal Code 2074. The default term is calculated under the Criminal Offences (Sentencing and Execution) Act 2074 and is capped — non-payment does not convert into an open-ended custodial term. The same default mechanism applies to unpaid compensation orders made in favour of the victim.
Community service is the seventh type of punishment recognised by Section 40 of the Penal Code 2074. It is unpaid work performed by the convict in the community, calibrated to the imprisonment term the convict would otherwise have served. It is available only in lieu of short prison terms in less serious cases, typically for first-time offenders, where the harm has been or is being compensated and the convict consents to the order. The Sentencing Act 2074 governs eligibility and execution.
Two statutes govern sentencing. The National Penal Code 2074 prescribes the punishment band for each offence — for example, 3 to 10 years for reckless homicide. The Criminal Offences (Sentencing and Execution) Act 2074 governs how the trial court fixes the actual term within that band, the rules on suspended sentences, probation, community service, default imprisonment, juvenile sentencing and remission. The Sentencing Rules 2075 supplement the Act on procedural detail.
No. Confiscation of property is not a stand-alone punishment under Section 40 of the Penal Code 2074. The seven recognised types of punishment are listed exhaustively and confiscation is not one of them. Forfeiture of the specific instrumentality of the offence — the weapon used in a homicide, the vehicle used in a kidnapping, the proceeds of a theft — may be ordered as ancillary relief under the procedural code and the Special Acts, but the offender's general estate cannot be confiscated as a Section 40 punishment.
A fine is paid to the State as part of the offender's punishment under the Penal Code 2074. Compensation is paid to the victim or the victim's successor for the harm, injury or loss caused by the offence. Both can be ordered in the same judgment alongside imprisonment, and both are enforceable. The compensation order is enforceable as a money decree, so the victim does not need to file a separate civil suit to recover it. The two sanctions are independent and both can run in the same case.
A suspended sentence is a term of imprisonment fixed by the trial court but not actually served, on the condition that the convict does not reoffend within a specified period. It is governed by the Criminal Offences (Sentencing and Execution) Act 2074 and is available in eligible cases where the imprisonment term is short, the offender is a first-time offender, and the court is satisfied that suspension serves rehabilitation. If the convict reoffends within the suspension period, the suspended term is activated and served alongside any new sentence.
No. The Act Relating to Children 2075 sets a separate sentencing regime for offenders below the age of eighteen. Children in conflict with the law are tried in juvenile benches, and on conviction may be ordered to be placed in juvenile reform homes for a calibrated term, subjected to community-based supervision, or directed to specific educational or rehabilitation programmes. Adult-tier imprisonment under the Penal Code 2074 does not apply to juveniles. Section 39 of the Penal Code also lists offender age below eighteen as a mitigating factor.
The Sentencing Act 2074 directs the trial court to consider the gravity of the offence, the harm to the victim, the offender's mental state and motive, the offender's age and antecedents, and the catalogue of mitigating and aggravating factors in Section 39 of the Penal Code. Mitigating factors include offender age below 18 or above 75, no prior record, voluntary confession, surrender, agreement to compensate the victim, diminished capacity, instigation by another, and insignificant harm. The court records reasons for the term and fine actually fixed.
No. Each offence in the Penal Code 2074 carries its own prescribed sanction — some carry imprisonment alone, some carry fine alone, some carry both, and some allow the court to choose between them. Where the offence section says imprisonment up to one year, a fine up to NPR 10,000, or both, the court may impose any one of the three within the band. Where the section prescribes both as cumulative — for example reckless homicide under Section 181 — the court must impose both.
Yes, in most cases. Section 186 of the Penal Code 2074 directs the trial court to order reasonable compensation to the victim or the victim's successor as part of the criminal judgment. The compensation amount is fixed on the facts — earning capacity of the deceased, dependants' loss of support, medical and funeral expenses, and the offender's means. The order is enforceable as a money decree, and a separate civil claim is not required. Compensation stands alongside any imprisonment and any fine paid to the State.
Yes. Conviction and the sentence imposed are both appealable to the High Court within the limitation set by the Criminal Procedure Code 2074. The appellate court may confirm the sentence, reduce it within the prescribed band, set it aside, or order a re-sentencing where the trial court failed to apply the Section 39 mitigating-factor catalogue or the Sentencing Act 2074 properly. A further appeal lies to the Supreme Court on questions of law, including questions of sentencing principle.
Hire a lawyer at the earliest stage — on FIR registration, on detention, or on receipt of a notice to appear. The sentencing argument is decided alongside conviction at the District Court, not after, and the mitigating-factor record has to be built during trial. A defence that opens with the Section 39 mitigating factors, the offender's age and antecedents, the agreement to compensate the victim, and a community-service or suspended-sentence prayer changes outcomes in cases where the prosecution's headline argument is incarceration. Alpine Law Associates' criminal practice handles sentencing arguments at every level.
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This article is intended solely for informational purposes and should not be interpreted as legal advice, advertisement, solicitation, or personal communication from the firm or its members. Neither the firm nor its members assume any responsibility for actions taken based on the information contained herein.
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