Cases of cyber-enabled financial fraud are rising in Nepal, with students and youth aged 19–30 identified as the most frequent offenders. A Strategic Analysis Report 2024 by the Financial Intelligence Unit (FIU) of Nepal Rastra Bank (NRB) sheds light on alarming trends in online fraud and suspicious financial activities.
The report highlights several instances of cyber fraud. In one case, journalist Bhojraj Thapa fell victim to impersonation when Arjun Saud created a fake Facebook account using Thapa’s name to solicit donations, falsely claiming Thapa’s child required urgent medical treatment. Saud collected Rs 283,026 through mobile payment services and a bank account. He was later convicted under the Electronic Transactions Act 2006 and National Penal Code 2017.
In another incident, a Kathmandu-based computer importer lost $17,520 after being deceived by a phishing email that altered the seller’s bank account details. The email directed the payment to Lloyds Bank in the UK, where the funds were quickly withdrawn before the scam was discovered.
Similarly, a man with the surname Rana from Pokhara, lost $78,000 after scammers on WhatsApp convinced him he could inherit $78 million from a deceased Canadian named Alex Clerk Rana.
The report revealed that 63% of suspicious transaction reports (STRs) received by FIU as of May 31, 2024, were related to cyber fraud. Over 70% of cybercrime suspects were aged 19 to 30, with individuals identifying themselves as students being most involved. Fraudsters frequently exploit digital platforms, using schemes such as fake lotteries, gifts, and parcel promises. They also create fake social media profiles to solicit money and use one-time passwords (OTPs) and other digital tools to access accounts. Most fraudulent activities occur within three months of opening a bank account, indicating that newly opened accounts are often targeted.
To combat the growing threat of cyber fraud, the report recommends strengthening customer identification processes, including ensuring accurate Know Your Customer (KYC) verification and linking digital banking services to the customer or a family member’s registered mobile number. It also suggests imposing transaction limits and a cooling period on newly opened accounts. Awareness campaigns should be conducted to educate financial sector employees and the general public about the risks of cyber fraud. Furthermore, the report emphasizes the need for real-time monitoring systems to track suspicious transactions and calls for holding negligent financial institutions accountable. Additionally, it proposes introducing insurance for digital wallets and cards to protect consumers from fraud-related losses.
The report advises against sharing sensitive information, such as personal data or account details, over email or social media. It highlights the importance of cooperation between government agencies, law enforcement, and private institutions in controlling cyber fraud.
“As online transactions increase, so do cybercrimes,” said a senior official from NRB. “The report highlights the need for vigilance against evolving fraud schemes.” With digital platforms replacing traditional theft methods, the study underscores the urgency of adopting stronger preventive measures to safeguard the public from cyber-enabled financial crimes.
