Money Laundering: Is Hundi Transactions The Most Infamous Scams in Nepal?

Money laundering is the illicit method of creating large sums of cash acquired via crook activities, inclusive of drug trafficking or terrorist financing, which seem to have come from a valid supply and make the black money look like clean money.

One of the most frequent means of money laundering in Nepal is the Hundi, which is a type of illicit underground banking system. People that transact through hundis have networks that span practically the entire globe. They use hundi instead of official financial institutions to transmit money. The growth in Nepalese citizens working abroad has created opportunities for those working in the hundi.

The widespread problem of money laundering in Nepal has prompted the establishment of the Money Laundering Investigation Bureau, a government agency charged with combating money laundering, and terrorist financing (AML/CFT).

On Chaitra 17, 2078, the Financial Information Unit (FIU-Nepal) conducted an interaction program on trade-based money laundering (TBML) through virtual media. The event was attended by all the representatives of the unit, the supervision department of NRB, commercial banks, and the Nepal Bankers Association.

In the program, the FIU-Unit communicated to all the commercial banks to identify any suspicious TBML-related transactions as Nepal’s International trade is large and it is necessary to identify and report suspicious money laundering transactions that may take place.

Also, The Money Laundering Surveillance Unit forwarded the instruction in relation to its anti-money laundering and anti-terrorism efforts. For each transaction worth Rs. 7 lakhs or higher, commercial banks are required to submit the details of the transactions.