Nepal Rastra Bank (NRB) has issued a new directive requiring banks and financial institutions to use the National Identity Card (NID) as the sole basis for opening new accounts, effective from Magh 1, 2081.
Key Provisions of the Directive
1. Mandatory Use of National Identity Cards
- Banks must verify account holders’ details through the electronic records of the NID.
- Account openings from Magh 1, 2081, must be facilitated exclusively using the NID or its number.
2. Updating High-Ranking Officials’ Details
- Financial institutions are required to update the NID details for accounts held by:
-
- Current or former high-ranking officials in Nepal.
- Officials from neighboring countries and other foreign dignitaries.
- Representatives of international organizations.
-
- This update must be completed by Magh 1, 2081.
3. Exceptions for Government Payments
Accounts related to government payments, such as social security benefits, may be opened using details provided by the respective government authority.
4. Verification of Customer Mobile Numbers
- Banks are instructed to confirm that the mobile number provided during account registration belongs to the registering individual.
5. Monitoring and Freezing of Assets
- Banks must regularly verify whether their transactions involve individuals, groups, or organizations flagged by the Ministry of Home Affairs.
- If flagged entities or related persons are found to hold accounts, lockers, or other assets, banks are required to:
-
-
- Freeze the assets immediately.
- Notify the Financial Information Unit (FIU) within three days.
-
Implications of the Directive
This measure aims to enhance financial transparency, prevent illicit activities, and streamline the identification process in banking operations. By leveraging the National Identity Card system, the directive also strengthens compliance with anti-money laundering protocols and facilitates better oversight of high-risk accounts.