The preparations for implementing Central Digital KYC (Centralized Electronic Know Your Customer) in the Nepali capital market have reached the final stage. The CDS & Clearing Limited (CDSC), the company responsible for providing centralized depository, clearing, and settlement services, has reached the final stage of preparations for implementing Central Digital KYC. In October 2020, the Securities Board of Nepal (Sebon), the capital market regulatory body, issued a guideline related to Centralized KYC and instructed the CDSC to implement Central Digital KYC. "Following the instruction, CDSC had begun the process of implementing Central Digital KYC, which has now reached the final stage," said Suresh Neupane, Spokesperson of CDSC.

At present, brokerage companies, merchant bankers, and other capital market service providers have collected customer details digitally and in paper form, but it is not centralized.

Customers are required to submit their personal details to every organization related to the capital market. After opening a Demat account, the customer has to fill out KYC even when opening a share account, broker ID, and other accounts. Given the current situation, CDSC has said Centralized KYC is being introduced whereby if customers fill out personal details in one entity, they do not have to again fill KYC to other entities. Currently, central digital KYC is also being tested in some broker companies and merchant bankers. "Now we are testing central digital KYC in some of the entities related to the capital market. And, the result is also very good," said Neupane, adding, "After completing the rest of the preparations, we will implement the Centralized KYC within the next 2 months." Once the Centralized KYC comes into implementation, the customers do not have to go through a troublesome process. According to CDSC, the system (software) of Centralized KYC should be approved by the Department of Information Technology of the Nepal government. With the process for getting approval already initiated, CDSC believes it will get the approval in the next 15 days. However, the agency is yet to determine the service fee to be charged to the customer regarding centralized KYC. According to the company's officials, discussions are ongoing with the Sebon, brokerage companies, merchant bankers, investors, and other stakeholders. "Once we get approval from the Information Technology Department and fix the service fee, it won't take long for us to implement the centralized KYC," said Neupane.