A banking offense refers to illegal activities related to banking operations or financial transactions for unlawful gain. The Banking Offence and Punishment Act of 2064 regulates 14 types of banking offenses in Nepal. These offenses include unauthorized account openings, withdrawals, causing losses through forged documents, halting loan disbursements to harm borrowers, and borrowers with outstanding loans acquiring assets. The Act outlines punishments for offenses, which can include imprisonment and fines. It also describes procedures for filing complaints and investigations.

2. A banking offense is a criminal act or misconduct occurring within the banking and financial industry. It involves illegal
activities related to banking operations, financial transactions, or manipulation of financial systems for unlawful gain.
The specific law regulating banking offenses is the Banking Offence and Punishment Act, of 2064. Section 2(b) of the Act
stated that banking offense means the offenses as stipulated under Chapter-2.

3. TYPES OF BANKING OFFENCES
BANKING OFFENSES CAN BE CLASSIFIED BASED ON THEIR
FREQUENCY, AND THE BANKING OFFENCE AND PUNISHMENT ACT,
2064, HAS ENLISTED 14 TYPES OF BANKING OFFENSES.
Unauthorized
opening of
accounts or
demanding cash
payments
Unauthorized
withdrawals or
payments
Causing losses
through account
alterations,
ledger
manipulations,
or forgery.
Intentionally
stopping credit
facilities to harm a
borrower's working
project.
Borrowers with
outstanding dues
acquiring assets or
opening accounts.
Conducting
transactions by
misrepresenting
banks or
financial
institutions.
Abuse or
unauthorized
use of electronic
means for
payments
Providing
unauthorized
loans
Misusing
credit
facilities.
Misusing
banking
resources and
assets
Engaging in
excess, low,
or false
valuation
practices
Carrying out
irregular
economic or
financial
transactions
Engaging in
DHUKUTI
transactions
Conducting
illegal banking
transactions.

4. SECTION 3 OF THE BANKING OFFENCES AND PUNISHMENTS ACT, 2064 STATES THAT,
NOT TO OPEN AN ACCOUNT OR DEMAND CASH PAYMENT IN AN UNAUTHORIZED MANNER: NO
ONE SHOULD OPEN AN ACCOUNT WITH FALSE DOCUMENTS, CREATE AN ACCOUNT UNDER
FICTITIOUS NAMES, OR DRAW A CHECK FROM AN ACCOUNT KNOWING IT LACKS SUFFICIENT
FUNDS TO COVER THE AMOUNT.
• Section 5 of the Banking Offences and Punishments Act, 2064 states that, not to make
unauthorized withdrawals or payments: while conducting transactions with a bank, individuals
must not withdraw money from others' accounts without permission, or transfer funds without
authorization from a customer’s account.

5. • Section 10 of the Banking Offences and Punishments Act, 2064 states that, acquiring assets or
opening an account by a borrower having over dues: The debtor who is blacklisted should be
restricted from opening any new account, except for a thirty-day period dedicated to repaying the loan,
withdrawing essential living expenses, or acquiring property for personal sustenance, either within the
country or abroad.

6. SECTION 11OF THE BANKING OFFENCES AND PUNISHMENTS ACT, 2064 STATES THAT, THE
CREDITOR MUST NOT WITHHOLD A LOAN OR FINANCIAL FACILITY IN A WAY THAT HARMS THE
ONGOING PROJECT OF THE DEBTOR: ONCE A BANK OR FINANCIAL INSTITUTION APPROVES A LOAN OR
FINANCIAL FACILITY FOR A DEBTOR'S PROJECT AND DISBURSES THE FIRST INSTALLMENT, THEY
CANNOT HALT THE RELEASE OF THE REMAINING INSTALLMENTS WITHOUT SUFFICIENT
JUSTIFICATION AND VALID REASONS.
• Section 12 of the Banking Offences and Punishments Act, 2064 states that, not to make loss by making
alteration in the account or ledger or by committing forgery or fraud: It is strictly prohibited to cause any
loss to a bank or financial institution by falsifying or forging documents or account books. This includes
actions such as signing documents with altered dates, numbers, or transactions to deceive and mislead.

7. 1)Individuals are prohibited from deceiving the bank and unlawfully taking away movable or immovable property
belonging to the bank.
2)It is not allowed to cause any financial loss to the bank through false or fraudulent statements, promises, or any
other means that aim to acquire, control, or harm the bank's cash, funds, security bills, or other movable/immovable
assets.
3)Engaging in transactions by presenting false information or using deceptive tactics, such as manipulating one’s
name with another person's name, with the intention of avoiding punishment or causing harm to a bank or cooperative
for personal or others' benefit is strictly prohibited.

8. SECTION 14 OF BANKING OFFENCES AND PUNISHMENTS ACT, 2064 States that, not to carry out and
cause to carry out irregular economic or financial transactions: engaging in misappropriation during economic
and financial transactions, with the intention of causing losses to the bank or showing favoritism to any
individual, is strictly prohibited.
• Section 14(a): Not to perform Dhukuti transaction.
• Section 14(b): Cooperatives registered in accordance with the Cooperatives Act, 2048 BS should not do
banking business without the approval of Nepal Rastra Bank.

12. In case of inability to maintain large amount, 2 years of imprisonment and fine up to Rs. 1 million.
Section 16: imprisonment for up to six months or a fine of up to Rs. 5,000 or both for person creating
hindrance in investigation and inquiry proceedings

13. (1) Complaint can be filed within one year from the date of knowing that such offense has been committed
under this Act and within six months from the date of such complaint, the Government of Nepal shall
publish a notice in the Nepal Gazette and file a case before the designated court.
(2) Notwithstanding anything written in sub-section (1), a case may be filed against such employee or
official at any time in connection with embezzlement or damage to the property of the bank or financial
institution when an employee or official of a bank or financial institution is in his/her position and even after
such an employee or official retires from his/her post, there will be no hindrance in pursuing the case.

15. CONTACT US :
• To consult or get legal advice from our expert for Banking laws in Nepal/Banking
Offence in Nepal/Banking Lawyer in Nepal; Contact us at: 977-01-4102849/977-
9851059026, Prime Law Associates, Anamnagar, Kathamndu,
info@primelawnepal.com, www. primelawnepal.com
•
• This article is for informational purposes only and shall not be construed as legal advice,
advertisement, personal communication, solicitation or inducement of any sort from the firm
or any of its members. The firm shall not be liable for consequences arising out of any action
undertaken by any person relying on the information provided herein.
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