Nepal’s financial oversight system recorded a 24 percent surge in suspicious transaction reports (STRs) and suspicious activity reports (SARs) last fiscal year, with cases climbing from 5,935 to 7,338, according to a recent report by the Financial Intelligence Unit (FIU) under the Nepal Rastra Bank (NRB).
This escalation, tracked through the government’s anti-money laundering (goAML) platform, reflects intensified monitoring as Nepal faces global pressure to bolster its anti-money laundering (AML) framework.
The goAML system, now connecting 1,639 investigative and regulatory agencies, has seen a significant rise in both reporting and analysis of STR/SARs over the past eight fiscal years. In fiscal year 2023/24, while 7,338 STR/SARs were received—a steep jump from the previous year—only 1,635 were analyzed, highlighting a bottleneck in processing capacity.
Of those, 889 were forwarded to law enforcement agencies (LEAs), regulators and supervisors, while 746 were dropped due to insufficient evidence or gravity.
In 2023/24, the FIU forwarded details of 60 suspicious transactions to the Department of Money Laundering Investigation, 615 to Nepal Police and 197 to the Department of Revenue Investigation.
Likewise, 19 were forwarded to anti-graft body the Commission for the Investigation of Abuse of Authority, while 38 and 30 cases, respectively, forwarded to Inland Revenue Department and Payment Systems Department of the central bank. Though these figures mark progress from previous years, the gap between reporting and analysis points to strained resources, underscoring the need for enhanced analytical capabilities.
Nepal’s efforts in combating money laundering come under the shadow of its Feb 2025 placement on the Financial Action Task Force (FATF) ‘gray list’ after a plenary in Paris. Criticized for weak enforcement and oversight in sectors like cooperatives, the country faces a two-year deadline to exit “increased monitoring” or risk blacklisting, which could disrupt trade and investment. The greylisting, which is the second after 2008-2014, could result in higher transaction costs and erode investor trust, observers say.
The FIU report reveals persistent hawala and trade-based laundering alongside rising digital crimes—cyber fraud, cryptocurrency misuse and illegal online gambling. Likewise, tax evasion tied to cross-border flows remains prevalent in Nepal, according to the report.
Although large cash transactions dipped to 1.69m, the STR/SAR surge suggests either growing illicit activity or sharper detection by authorities. Experts attribute the reporting spike to improved bank compliance and evolving criminal tactics. The IFU said in its report that it has adopted risk-based prioritization in goAML and plans to integrate AI and advanced techniques to boost efficiency.
