ID cards made mandatory to deposit money in others' accounts

Published On: July 20, 2017 02:45 AM NPT By: Sagar Ghimire  | @sagarghi

KATHMANDU, July 19: Depositors will now have to show their identification card if they are depositing cash in others' bank account. Bank and financial institutions (BFIs) may not accept cash if depositors fail to show identification documents.

The new additional rules, including the requirement of identity card, introduced by the Nepal Rastra Bank (NRB) as part of its efforts to prevent money laundering and terrorism financing came into effect from Sunday. 

The central bank, in its recent circular to the BFIs, said that it enforced new rules due to the requirement to introduce additional provisions on Money Laundering Prevention Act, 2008 and Assets (Money) Laundering Prevention Rule, 2016, for preventing the financial and banking system getting abused by the ill-gotten money.   

With the new rule coming into enforcement, anyone depositing cash higher than Rs 100,000 in others' bank account are required to produce identification card. This is the new requirement for the BFIs to identify and verify the client's identity, commonly known as know-your-customer (KYC) process. 

Earlier, BFIs used to ask clients to show their identity card only while withdrawing huge cash. The central bank has now made it mandatory for the BFIs to seek identification documents even while depositing cash. 

Not only has the identity card become compulsory, BFIs also ask the person depositing money in other's account to mention the reason for such deposit. 

Similarly, barring some NRB-prescribed circumstances, there would not be any cash transaction of or higher than Rs 1 million, implying that BFIs would not provide withdrawal of cash of or higher than Rs 1 million. 

Another rule that the central bank has introduced is the requirement of identity card to withdraw cash higher than Rs 100,000. If a check bearer does not have a bank account where s/he is withdrawing cash, the bank will now require the withdrawer to furnish identification card. 

However, there are concerns that such cumbersome transaction process in the BFIs could discourage people from using the banking channel. 

Dilip Munankarmi, a general saver, told Republica that the new rules aimed at curbing abuse of banking channel for money laundering and terrorist financing is cumbersome. He said that banking transactions should be easier and should get rid of unnecessary documents. “Let's not compel the people to seek other alternatives (of banking channels),” he added.  

Some bankers also share similar worries about the implications of the new anti-money laundering rules. “The more we make the banking process and transactions cumbersome, more people will be pushed toward informal channel as well as cooperatives,” Manoj Gyawali, a bank executive, told Republica.

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