Nepal Rastra Bank Urges Financial Prudence To Combat Bounced Cheques
22nd July 2025, Kathmandu
Nepal Rastra Bank (NRB), the nation’s central bank, has issued a crucial public notice strongly advising all individuals and institutions to verify their bank account balances before issuing any cheques. This proactive measure is part of NRB’s ongoing financial literacy initiative, aimed at curbing the rising number of dishonored cheques and the associated legal and financial repercussions.
Nepal Rastra Bank
The central bank emphasized that issuing a cheque without sufficient funds is not merely a financial oversight but a punishable offense under existing Nepali banking laws. This warning comes amidst a noticeable increase in cheque-related disputes and court cases, prompting financial institutions to raise concerns about the misuse of cheques and a general lack of public awareness regarding the serious legal consequences.
Understanding the Consequences of a Dishonored Cheque:
According to the NRB’s directive, if a cheque is presented for payment and bounces due to insufficient funds, the process unfolds as follows:
1. Grace Period: The concerned bank, financial institution, or cooperative bank may grant the cheque issuer a grace period of up to 45 days to deposit the necessary funds.
2. Official Dishonor: If the issuer fails to deposit the required amount within this timeframe, the bank is mandated to officially confirm the cheque’s dishonor due to insufficient funds and return the cheque to the holder within three working days.
Legal and Financial Penalties Await:
The NRB’s notice clearly outlines the severe liabilities faced by individuals or institutions responsible for issuing a bounced cheque:
Full Payment with Interest: The issuer is legally obligated to pay the cheque holder the entire amount stated on the cheque, along with applicable interest calculated from the cheque issuance date until the date the payment is finally settled.
Monetary Penalty: An additional penalty of 5 percent of the cheque amount may be imposed.
Imprisonment: Crucially, the issuer could also face imprisonment as per the country’s prevailing legal provisions, highlighting the gravity of the offense.
“Let us avoid legal punishment for dishonored cheques,” the NRB’s official notice stressed, urging all account holders to exercise utmost caution and responsibility in their cheque-based transactions. “This is not just a financial issue, it is a banking offense.”
Promoting Responsible Banking Practices:
NRB officials believe this public reminder will significantly contribute to more responsible banking practices across the nation. By urging account holders to “Check your balance before issuing a cheque,” the Nepal Rastra Bank aims to enhance financial literacy and reduce banking malpractice and encourage ethical and lawful banking practices.
The NRB remains committed to fostering trust in the banking system through timely regulations and comprehensive public awareness campaigns. For further assistance or queries, the full notice is accessible on the NRB’s official grievance portal, www.gunaso.nrb.org.np, and the Financial Customer Protection Helpline can be reached at 01-5719605.
Read more here: Nepal Rastra Bank
