NRB introduces 10 new rules on cheque bounce: stricter blacklisting measures enforced

KATHMANDU: In a decisive move to curb financial misconduct, Nepal Rastra Bank (NRB) has introduced ten major regulatory amendments concerning cheque dishonor (cheque bounce) cases. Issuing a circular on Thursday, the central bank directed all banks and financial institutions (BFIs) to implement these revised provisions immediately.

The new provisions include critical updates to how bounced cheques are handled, who can be blacklisted, the conditions for removing names from the blacklist, and the timeframe for related procedures. Here’s a breakdown of the key changes:

1. Blacklisting for Insufficient Balance or Any Invalid Reason

Any cheque that bounces due to insufficient funds or any other reason—except when the cheque bearer fails to verify the cheque details—will now lead to the issuer being blacklisted.

2. Six-Month Time Limit for Blacklisting Request

If a cheque is dishonored due to insufficient funds, the cheque bearer must apply for blacklisting the issuer within six months from the certified date of cheque return. The original bounced cheque must be submitted with the application to the concerned bank or financial institution.

3. Mandatory Certification of Cheque Dishonor

The issuing bank or financial institution must provide official certification that a cheque has been dishonored if it was returned unpaid.

4. Five Working Days to Report to Credit Information Center

Upon receiving a blacklisting request with supporting documents, the concerned BFI must inform the Credit Information Center (CIC) within five working days.

5. Seven-Day Payment Window After Notification

If a cheque is bounced, the issuing individual or institution must be notified and given a 7-day deadline (excluding public holidays) to settle the amount. Failing this, BFIs must proceed to blacklist them.

6. Blacklisting Issuer and Related Parties

The regulation now mandates that not only the person who signed the cheque but also associated individuals, firms, or organizations involved in the issuance can be blacklisted.

7. Mandatory BFI Certification Even Without Payment

Even if the cheque remains unpaid, the issuer must still receive a certified notice of dishonor from the bank or financial institution.

8. Cheque Payment Within Six Months to Avoid Blacklisting

If the cheque issuer manages to clear the payment, earmark the amount for payment, or sign a legal reconciliation agreement within six months, their name can be removed from the blacklist.

9. Blacklisting Through Cheque Holder’s Request

BFIs will only initiate the blacklisting process upon a formal written request by the cheque holder, supported by the original bounced cheque and proof of dishonor.

10. Blacklisting Removal Based on Payment or Legal Settlement

The regulation allows blacklisted names to be removed if payment is made, amount is earmarked for the beneficiary, or a formal legal settlement is reached, with proper notification to the BFI.

These reforms are expected to significantly tighten cheque-based transactions and reduce the misuse of cheques in Nepal’s banking and business ecosystem. NRB’s effort aims to strengthen financial discipline, improve the credit environment, and reinforce trust in banking instruments.