KATHMANDU, JAN 02 - Nepal Rastra Bank (NRB) today vowed to formulate ‘Money Laundering Act," to curb the unfair practices of legalising the illegal incomes. The latest commitment from the central bank is in line with the global movement against money laundering."We have begun consultations," Ram Babu Pant, Deputy Governor of the NRB said adding that the enforcement of the Act has been necessary because foreign banks have been asking for legal commitment against money laundering with the banks in Nepal.
Money laundering is a process by which banks are used as vehicle to disguise or ‘launder’ the proceeds of criminal activities. Such activities undermine a bank’s integrity, damage its reputation, deter the honest customer; and expose bank to severe sanctions.Deputy Governor Pant, addressing a gathering of senior experts from the central bank and several commercial banks came together for an interaction programme on money laundering also emphasised that the Act will help controlling the bribery and corruption in the country.
Krishna Bahadur Manandhar, Executive Director at Foreign Exchange Department of the NRB presented a paper on the Need for Money Laundering Act.
"We are facing international pressures because the world is waiting for our commitment against money laundering.
In absence of the At, there is a high possibility that property illegally earned in or outside the country can be brought into banking channel and converted into white money, Manandhar said. "The Act will check this," he added.
According to Manandhar a separate financial intelligence unit will be formulated to evaluate the cases of money laundering.
"So far, we believe, we do not have the big cases of money laundering in Nepal because of the tough foreign currency transaction rules," he said.
The participants of the programme pointed out the higher chances of money laundering because of 1400 kilometre-long open border with neighbouring India.
"In addition to this, the informal sector has a major influence in the financial market," Narendra Bhattarai, President of Nepal Bankers’ Association (NBA).According to the latest statistics, the illegally earned money mostly amassed through terrorist activities that worth almost 2 to 5 percent of the global gross domestic products are legalised through banking channel every year.Posted on: 2004-01-03 04:26

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