Finance Minister insists on amendment in law against banking offense

KATHMANDU: Finance Minister Bishnu Prasad Paudel has said the Bill to amend the Banking Offense and Punishment Act-2064 BS has been registered in the parliament.

He said the Bill aims to make investigation, prosecution and punishment against the banking offense including the case of cheque bounce more systematized and effective.

In his address to a meeting of the Finance Committee, House of Representatives (HoR), today, he said reports regarding banking frauds including cheque are on the rise.

The finance minister apprised the meeting that the Bill has prioritized the provision of fine in cases relating to banking fraud including the cheque bounce.

Putting his view in the meeting, lawmaker Dr Swarnim Wagle proposed to prioritize the provision of fine instead of jail sentence in case of banking fraud. He said such provision has been in global practice as well, underlining the need to conclude the Bill soon.

Another lawmaker Padam Giri alleged of a negligible legislative role of the parliament, leading to the pending of numerous bills in the Committee.

The Bill was registered by the then Finance Minister Dr Prakash Sharan Mahat on September 2, 2023.

It is said the government realized the need to amend the Act bearing in mind the need of different legal treatment to cases of cheque bounce, the order from the Supreme Court to maintain uniformity in the legal approach to the case and the assessment of the Office of the Attorney General.

The Bill proposed that if the account holder does not have sufficient deposits in the bank for payment as demanded by a cheque, such cheque be returned to the bearer.

If the bearer wants to prove it is a case of cheque bounce, the respective bank should inform the account holder to make sure the deposits of the amount sufficient for the payment as demanded by the cheque by not exceeding 30 days.

It has warranted any account holder not to issue a cheque requesting for the payment exceeding the deposit amount.  The procedures to establish the case of a cheque bounce will be initiated if the demanded amount is not deposited in the bank by the next 30 days.

The existing Banking Offense and Punishment Act incorporates the provisions for fine and an imprisonment up to three months if a cheque is bounced. However, the proposed bill has a provision that an issuer of a cheque will be required to pay five percent of a due amount in fine to the check bearer including imprisonment on the basis of the amount mentioned in the cheque if the cheque is proved to be bounced.

In case of a due amount up to Rs 500, 000 imprisonment up to one month has been proposed, it has been proposed up to six months in case of the amount ranging from Rs one to five million and up to two years for amount over five million.  The Bill proposed the provision allowing the registration of a case at the respective District Court within the three months if the case of cheque bounce is proved.