Kathmandu. Nepal Rastra Bank (NRB) has taken action against Lumbini Bikas Bank Limited and Excel Development Bank Limited for violating the regulatory provisions related to money laundering prevention.
According to the third quarter supervision report of the fiscal year 2080/81 made public by the Department of Bank Supervision, both the banks have not been able to effectively implement the integrated directives on anti-money laundering.
According to the Nepal Rastra Bank, Lumbini Bikas Bank has not fully complied with the provisions related to customer due diligence under the Integrated Directive, 2080 issued to the licensed ‘A’, ‘B’ and ‘C’ class banks and financial institutions. In addition, the NRB has concluded that the system of identifying the real beneficiary of the customer has not been implemented effectively.
Similarly, Excel Development Bank has not fully complied with the provisions of the same directive related to customer identification and risk management. During the inspection, the NRB found weaknesses in the implementation of the provisions as per points 2(4) and 2(5) of the directive.
Based on these weaknesses, Nepal Rastra Bank has warned both banks in accordance with Nepal Rastra Bank Act, 2058 BS and Bank and Financial Institution Act, 2073.
Nepal Rastra Bank (NRB) has also directed the banks to effectively implement the legal and regulatory provisions related to prevention of money laundering and terrorist financing.
