Police reports filing 7,101 cases of banking fraud in FY 2022/23, which was almost double of the number in FY 2021/22

KATHMANDU, Aug 10: The government is looking forward to enforcing a new law related to banking offense and punishment, citing growing cases of banking fraud.

A meeting of the Council of Ministers on Tuesday gave the go ahead to the authorities concerned to table the draft of the bill on the second amendment to the ‘Banking Offense and Punishment Act 2008’. Nepal Rastra Bank in its monetary policy for the current fiscal year also talks about taking initiative to enforce new laws to tackle banking frauds.

The records with the District Police Range, Kathmandu show that a total of 7,101 cases filed in the district in the fiscal year 2022/23 were related to banking offenses, which accounts for more than half of the total cases filed.

The police received 3,715 cases of similar offenses in the previous year. It shows that the cases of banking offense almost doubled during the review year.  

According to a study report of the International Monetary Fund (IMF), banks’ estimated yearly potential losses from cyberattacks could amount to as high as nine percent of their net revenue globally in 2023.

Sunil KC, president of Nepal Bankers’ Association, said the advent of new technologies has transformed the way banking operations are conducted and has brought numerous benefits. “However, it has also increased several challenges such as cybercrime, identity theft, fraudulent transactions and other forms of banking offenses,” said KC. “Therefore it calls for an effective law and strong collaboration among all concerned stakeholders to timely address the situation.” 

The cases of cheque bounce and misuse of bank debt, among others, had been the most common banking offenses seen in the country from the past. The government for the first time enacted the Banking Offense and Punishment Act in 2008, aiming to mitigate the effects and risks that banks and financial institutions (BFIs) could face.

According to the BFIs, they undergo various types of banking offenses. The existing Banking Offense and Punishment Act has defined some of the offenses as opening an account or demanding cash payment in an unauthorized manner, making unauthorized withdrawals or payments, obtaining or making payment by way of abuse or unauthorized use of electronic means, making available or providing loans in an unauthorized manner, misusing credit facility, misusing banking resources, means and assets, and opening account by the borrower having outstanding dues, among others.

Along with the evolving information technology, banks have also started providing their customers with easy access to banking services by using the internet and cell phones. However, the cases of hacking and embezzlement of funds are also growing. In this regard, the regulation of banking offenses through IT has been the prime necessity for many countries including Nepal, according to bankers.

Stakeholders said the new act should incorporate making authorities concerned proactive for careful investment, continuous monitoring and efficient recovery. 

 
• government
 
• banking_offense
 
• fraud