HIMALAYAN NEWS SERVICE
KATHMANDU: The central bank has stressed that banks need to comply with the anti money laundering regulation by using only formal channels for transactions and fulfilling their responsibility regarding taxation as well.
“The anti money laundering rules not only include drug money, terrorism transfers and illegal weapons deal but compliance with cross-border transactions and paying taxes are also included,” said Nepal Rastra Bank (NRB) governor Dr Yubaraj Khatiwada, during an interaction programme on ‘Anti-Money Laundering/Combating Financing of Terrorism: Banks’ Role and Challenges’, here, in Kathmandu.
“Since Nepal is affiliated to the Financial Action Task Force (FATF) for Anti-Money Laundering/Combating Financing of Terrorism, the banking sector needs to follow the rules and be more vigilant,” he pointed out. FATF is a global standard setting body for anti-money laundering and combating the financing of terrorism.
Dr Khatiwada also expressed that NRB is flexible towards adapting these regulations and introducing legal provisions that will not affect financial stability citing that NRB amended the ‘Know-Your-Customer’ forms so that financial institutions would not face problems in retaining or attracting depositors.
During the programme, NRB deputy governor Maha Prasad Adhikary pointed out that Nepal has escaped from being blacklisted by FATF but will be scrutinised for implementation of the laws and their execution.
“However, we are not asking banks to work like intelligence agencies or anything like that but bank employees need to be more vigilant in detecting acts of transfers of dirty money,” he pointed out.
Deputy governor of NRB Gopal Prasad Kafle also pointed out that enforcing anti money laundering regulation will usher in transparency and accountability in the banking sector.
President of Nepal Bankers’ Association Rajan Singh Bhandari said that enforcing Anti-Money Laundering/Combating Financing of Terrorism should not affect lending to productive sector and mobilising savings. “If the laws are too strict, people might store even the money earned legally at their homes instead of saving it in banks,” he pointed out.
The interaction programme was attended by CEOs of Mega Bank Nepal, Global IME Bank, Lumbini Bank and Civil Bank.