While Nepal Rastra Bank has been promoting electronic payments to encourage formal transactions, instances of misuse of electronic transactions for illegal activities have been uncovered. An investigation by the Central Investigation Bureau (CIB) of Nepal Police found that individuals involved in smuggling, illegal trade, and tax evasion were using mobile wallets for payment purposes. Remittance funds sent from abroad were being intercepted and rerouted into the accounts of relatives in Nepal through the misuse of mobile wallets.
On Monday, 28 April 2025, the CIB arrested 21 individuals associated with 19 companies for their alleged involvement in illegal transactions via mobile wallets. Preliminary investigations revealed that they conducted illegal transactions worth approximately Rs 1.77 billion through agents and sub-agents authorised by remittance companies across 11 districts.
Among those arrested are Birendra Sah and Dipendra Sah of DS Traders and Remittance in Morang; Sharwan Kumar Sah of Deepjyoti Traders in Mahottari; Taralal Yadav of Ria Traders, Hareram Mahato of Anand Traders in Saptari; Niraj Kumar Mahato of New Sandhya Enterprises; Alita Devi Mahato and Prakash Singh of Anita Money Transfer; Sanjeev Kumar Mahato of Jayma Janaki Money Transfer; and Arun Kumar Sah of Angel Enterprises.
Others arrested include Rajkamal Lonia of Puja Suppliers of Nawalparasi; Bhim Kumari Gurung of Tashi Rama and Tours; Rambilas Sah and Mamta Kumari Sah of Shivam Enterprise, Saptari; Kiran Jung Rana of Swastika Money Transfer, Parsa; Ganapati Pandey of Golden Sky Tours and Travels, Nawalparasi; Salma Khatun of Khushi Money Transfer, Birgunj; Sushila Kumari Shah of Radhika Traders, Saptari; Govinda Prasad Acharya of Himalayan Transfer, Chitwan; and Shambhu Mehta of Sagarmatha Remittance, Saptari, according to police.
According to Sudhir Raj Shahi of CIB, the detainees were found to have been illegally operating remittance businesses despite Nepal Rastra Bank having suspended some remittance companies. "They received foreign remittance amounts but engaged in unauthorised domestic transactions," he said. Further investigations are ongoing.
Earlier in July 2024, investigations had begun regarding allegations that gold transactions were being settled through these mobile wallets. A case worth Rs 9.6 billion was filed at the Kathmandu District Court at that time against two wallet operators.
Nepal Rastra Bank has set daily limits for mobile wallet transactions at Rs 200,000 per 10 transactions. Similarly, a maximum of Rs 100,000 per day can be transferred from a bank account to a wallet or vice versa. Transfers between wallets are limited to Rs 30,000 per day.
Wallet companies operating in agreement with remittance companies are allowed to channel remittance inflows into financial institutions in Nepal, without being subject to the limits.
However, following this incident, Nepal Rastra Bank has issued a directive to tighten regulations regarding the appointment of official representatives of wallet companies.
As per the new instructions, when appointing an authorised representative, wallet companies must collect and verify business and personal information, company registration documents, mobile numbers, citizenship certificates, and ensure that the appointees are not on any blacklist or implicated in any police reports related to criminal activities, money laundering, or terrorist financing.
Additionally, wallet companies are prohibited from appointing agents or sub-agents beyond their authorised representatives. Existing agents and sub-agents must either be changed or their services discontinued within three months. Responsibility for the transactions carried out by authorised representatives will lie with the wallet companies, who must also publish a monthly updated list of authorised representatives on their websites.
A study conducted last year by the Financial Information Unit had already pointed to a sharp rise in financial crimes through electronic platforms, highlighting the need for stricter preventive measures.
