Kathmandu: Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari has warned that the country’s banking system remains the most vulnerable sector to money laundering. Speaking at the AML Conference 2025 on Friday, Adhikari expressed concerns over financial institutions being exploited for illicit transactions.
“Nepal’s banking system is highly sensitive. Individuals engaged in misconduct are using banks and financial institutions (BFIs) to channel their illegally earned money,” he said.
His statement comes at a critical time as Nepal struggles to exit the grey list of the Financial Action Task Force (FATF), an international body combating money laundering and terrorist financing. Two weeks ago, the FATF decided to keep Nepal on its grey list along with 24 other countries, citing the country’s lack of vigilance against illegal financial activities.
The FATF raised concerns over inadequate government surveillance on high-risk sectors such as cooperatives, casinos, mines, and mineral resources. The organization has given Nepal a two-year deadline to address these issues and implement stronger measures to prevent financial crimes.
“Citing the shortcomings of Nepal’s financial system, the FATF has provided a longer time frame for improvement,” Adhikari said, underscoring the need for stricter monitoring and regulatory enforcement.
Phanindra Gautam, Secretary at the Office of the Prime Minister and Council of Ministers, identified four key areas—casinos, precious metals, unregulated business firms, and real estate transactions—as major contributors to Nepal’s financial risks.
“If the issue is not addressed on time, it will invite more problems for the country,” Gautam warned. He pointed to the Philippines as an example, noting that the nation successfully exited the grey list by strengthening supervision over illegal transactions, particularly in casinos.
As Nepal faces mounting pressure to curb money laundering, financial authorities are being urged to implement comprehensive reforms to ensure the integrity of the country’s banking system.