Govt Delays Mandatory Bank Statement Rule for Property Transactions Amid Controversy

KATHMANDU: The implementation of a new regulation requiring buyers and sellers in property transactions to submit mandatory bank statements has been put on hold, following concerns raised by the Prime Minister’s Office, according to officials from the Ministry of Land Management, Cooperatives, and Poverty Alleviation.

The Department of Land Management and Archive issued a directive on May 13, 2025, under the 2082 Anti-Money Laundering and Counter-Terrorism Financing regulations, mandating that property transactions include bank statements and Know Your Customer (KYC) forms. A circular was sent to land revenue and malpot offices nationwide on May 14, but internal disagreements among government bodies have stalled its enforcement.

The directive aims to curb underreporting of property values and large-scale cash transactions, which have been linked to money laundering. However, sources within the Land Ministry revealed that the Prime Minister’s Office has informally instructed a review, sparking discussions on whether to suspend or amend the rule. “We’re leaning toward eventual implementation, but the Prime Minister’s Office has prompted a reevaluation,” a ministry source said.

The debate centers on balancing transparency with practical challenges, including privacy concerns over bank statements, which require a separate legal basis, according to Secretary Phanindra Gautam from the Prime Minister’s Office. “The KYC and bank statement requirements don’t align perfectly. We’re moving toward suspension,” Gautam noted, adding that a decision is expected by Friday.

Nepal, currently on the Financial Action Task Force (FATF) grey list, has two years to exit by implementing anti-money laundering measures, including the property transaction directive. The regulation requires that transactions between NPR 1 million and NPR 5 million be conducted via banking or electronic payment systems, while those exceeding NPR 5 million must use electronic transfers or “good for payment” checks issued in the seller’s name. For advance agreements certified by local authorities, transactions above NPR 1 million must also include bank transfer evidence.

Land Ministry Secretary Kedarnath Sharma confirmed ongoing internal discussions, stating, “We’re deliberating whether to amend or suspend the rule. A decision is likely by Friday.” Land expert Jagat Deuja supports the directive, arguing it prevents reckless property dealings. “The provision is sound and should be implemented without amendments,” he said. However, Vishnu Ghimire, president of the Nepal Housing and Real Estate Association, called the bank statement and KYC requirements impractical and irrelevant, urging reconsideration.

The delay has sparked mixed reactions. While some see the rule as critical for transparency, others argue it burdens legitimate transactions. With Nepal’s FATF compliance deadline looming, the government faces pressure to balance regulatory enforcement with practical implementation, leaving the real estate sector in limbo as stakeholders await a final decision.