Banking offences as per the BOPA 2064
Latest amendment – 2082
There are 14 banking offences described by the Banking Offences and Punishment Act 2064
Section 3: Opening of an unauthorised bank account and demand for payment:
Not to open a bank account by presenting fake documents, knowingly or unknowingly, deposit money in such an account, and withdraw an amount from such an account.
Section 3 “ka”: Issue of a cheque without having sufficient balance:
Not to issue a cheque book to a cheque if there is not enough or no money in the bank account. The bank staff must return the cheque to the cheque drawer if there is not enough balance. The bank may inform the Cheque drawer about the cheque bounce and give a maximum of 45 days to deposit the mentioned amount to settle the transaction.
Section 5: Unauthorised withdrawal, transfer of cash from another person’s bank account.
One should not transfer money from a second person’s account.
Section 6: Misuse of electronic transfer, such as ATM, credit cards, debit cards
Unauthorised and misuse of electronic transfer is prohibited.
Section 7: Unauthorised borrowing and lending, under which the following actions should not be taken
-
- Presenting a false financial statement or an artificial business
- False valuation of collateral in cost estimation
- Disbursing credit beyond the approved limit
- Loan provided to the bank’s promoter, director, financially interested person, and their family. (Loan against FD, Gold, or government security is allowed).
- Durbursing loan facility more than the limit to the employees of the bank.
- Loan against collateral already mortgaged in another bank before releasing the collateral.
- Giving a loan to a fake borrower who does not have a real business.
- Lend more than the customer’s requirement.
- Taking or giving illegal money for a loan.
Section 8: Misuse of Loan
The loan taken from banks and financial institutions should be used as per the predetermined purpose.
Section 9: Misuse of Banking Assets
Section 10: Blacklisted person should not open a bank account to keep or withdraw money to acquire property, except for thirty days to repay the loan, and for daily living.
Section 11: Withholding the loan amount without a genuine reason causes the borrower’s financial loss.
Section 12: Causing the BFIs’ loss by falsifying the documents.
Section 12 “ka”: Acquiring movable or immovable property of the bank, submitting false details, or taking advantage by fraudulent means.
Section 13: Over/under valuation of collateral or preparing false financial statements.
Section 14 “ka”: Carrying out the Dhukuti transaction
Section 14 “kha”: A cooperative bank should not conduct banking business without the prior approval of Nepal Rastra Bank.
Punishment
| Offense | Punishment |
|---|---|
| Opening of an unauthorised bank account and demand for payment | Fine as per the claim amount Imprisonment upto 3 months |
| Issue of a cheque without having sufficient balance | Fine as per the claim amount, 5% penalty, and interest on principle amount from the time of cheque issue and settlement date, |
| Upto 15 lakhs | 1 month imprisonment |
| 15 -50 lakhs | 1 - 3 months imprisonment |
| 50 lakhs 1 crore | 3 - 12 months imprisonment |
| 1 - 10 Crore | 1- 2 years imprisonment |
| Above 10 crore | 2 - 4 years imprisonment |
| For section 5.6.7.8.9.10.12.14 | |
| Principal Amount | Imprisonment |
| 10 lakhs | Upto 1 year |
| 10 - 50 lakhs | 2 - 3 years |
| 50 lakhs - 1 crore | 3 - 4 years |
| 1 - 10 crore | 4- 6 years |
| 10 - 50 crore | 6 - 8 years |
| 50 crore - 1 arab | 8 - 10 years |
| More than 1 arab | 10 -12 years |
| Acquiring movable or immovable property of the bank, submitting false details, or taking advantage by fraudulent means: | Up to 50 lakhs (Principal amount + 3 years) 50 Lakhs - 1 crore (Principal amout + 3-5 years) 5 - 50 crore (principal amount + 5-7 years) 50 crore or more (Principal amount + 7-9 years) |
| Carrying out the Dhukuti transaction | '' |
| A cooperative bank should not conduct banking business without the prior approval of Nepal Rastra Bank. | '' |
In case the suit amount cannot be established in accordance with this Section, he/she shall be punished with a fine of up to Rs 10 lakh and imprisonment
up to two years.
In case any organization commits any offense specified under this Act and if the concerned office bearer or the employee committing such offense be identified, he/she shall be held liable, if the office bearer or the employee could not be identified, the person working in the capacity of the organization head at the time of the occurrence of the offense shall be held liable.
The person attempting to commit a banking offence, or the person or organisation indirectly involved in committing such offence, or the person assisting in committing such offence, or the employees or the Chief Executive Officer or the office bearer of such assisting organisation, shall be punished with half of the punishment that the offender may be subjected to.
For the CEO, Chairman, and Director, one more year of imprisonment.
Punishment to the Persons Creating Hindrance: If anyone creates a hindrance protest in the investigation and inquiry proceedings undertaken under this Act, the adjudicating officer may punish him/her with imprisonment up to six months or a fine up to Rs. 5000 or both, based on the report of the officer involved in the investigation and inquiry.
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