The central bank has asked Employees Provident Fund (EPF), Citizen Investment Trust (CIT) and Postal Savings Bank to enforce anti-money laundering (AML) measures.
Issuing a directive to implement AML laws at the state-owned fund managers to prevent transfers of illegally acquired money in accordance with a Cabinet decision, the central bank said that the law is needed to be implemented at the government operated institutions too as they manage huge amounts of money collected from civil servants and private sector employees.
The EPF – that provides provident fund services to more than 600,000 clients including government employees – extended its services to employees of private companies too, after Parliament passed the necessary legislation in 2014. Among the total clients, around 166,000 are private sector employees.
Likewise, the Citizen Investment Trust (CIT) manages the retirement fund, gratuity and pension and insurance funds of various organizations including government and non government institutions. It currently holds deposits totalling more than Rs 111 billion.
Similarly, the Postal Savings Bank holds deposits amounting to more than Rs 1 billion, collected particularly from rural areas of the country.
The central bank enforced the directive aiming to extend AML measures to non-banking sectors too. The new law will enable these institutions to act as an oversight agency to check black money transactions in their concerned areas.
The central bank has also asked them to devise working guidelines under headings like internal responsibility and work divisions, risk-based evaluation system and procedures and identification and follow up of risk-based customers and suspicious transactions. “These institutions have to prepare lists of high ranking government officials and their family members so that they can carry out instant enquiries in case any transaction made by them looks suspicious,” the directives read, adding that they need to update the overall customer lists annually based on the degree of risk.
The central bank has asked them to report to the Financial Information Unit (FIU), if an individual carries out transactions of more than Rs 1 million either physically or electronically from abroad. “If the transaction is done in foreign currency, the upper limit has been fixed at an amount equivalent to Rs 500,000,” the directives reads, adding, “For each of these transactions, a separate threshold transaction reporting is mandatory.”
Nepal is now in the process of fulfilling compliance of AML to report to the Asia Pacific Group (APG) on Money Laundering, a regional anti-money laundering watchdog of the Financial Action Task Force. The watchdog body is scheduled to conduct mutual evaluation of Nepal through peer review next year in 2020. With the evaluation time approaching soon, the government has been tightening and implementing the AML laws to check black money transfers, though the Department of Money Laundering Investigation has not been performing as it was expected also due to frequent transfer of its chief.
Issuing a directive to implement AML laws at the state-owned fund managers to prevent transfers of illegally acquired money in accordance with a Cabinet decision, the central bank said that the law is needed to be implemented at the government operated institutions too as they manage huge amounts of money collected from civil servants and private sector employees.
The EPF – that provides provident fund services to more than 600,000 clients including government employees – extended its services to employees of private companies too, after Parliament passed the necessary legislation in 2014. Among the total clients, around 166,000 are private sector employees.
Likewise, the Citizen Investment Trust (CIT) manages the retirement fund, gratuity and pension and insurance funds of various organizations including government and non government institutions. It currently holds deposits totalling more than Rs 111 billion.
Similarly, the Postal Savings Bank holds deposits amounting to more than Rs 1 billion, collected particularly from rural areas of the country.
The central bank enforced the directive aiming to extend AML measures to non-banking sectors too. The new law will enable these institutions to act as an oversight agency to check black money transactions in their concerned areas.
The central bank has also asked them to devise working guidelines under headings like internal responsibility and work divisions, risk-based evaluation system and procedures and identification and follow up of risk-based customers and suspicious transactions. “These institutions have to prepare lists of high ranking government officials and their family members so that they can carry out instant enquiries in case any transaction made by them looks suspicious,” the directives read, adding that they need to update the overall customer lists annually based on the degree of risk.
The central bank has asked them to report to the Financial Information Unit (FIU), if an individual carries out transactions of more than Rs 1 million either physically or electronically from abroad. “If the transaction is done in foreign currency, the upper limit has been fixed at an amount equivalent to Rs 500,000,” the directives reads, adding, “For each of these transactions, a separate threshold transaction reporting is mandatory.”
Nepal is now in the process of fulfilling compliance of AML to report to the Asia Pacific Group (APG) on Money Laundering, a regional anti-money laundering watchdog of the Financial Action Task Force. The watchdog body is scheduled to conduct mutual evaluation of Nepal through peer review next year in 2020. With the evaluation time approaching soon, the government has been tightening and implementing the AML laws to check black money transfers, though the Department of Money Laundering Investigation has not been performing as it was expected also due to frequent transfer of its chief.
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