Nepal Police intensify scrutiny of suspicious transactions, organizations after Zen-Z protests

KATHMANDU: Nepal Police have intensified financial surveillance and intelligence monitoring of individuals, organizations, and suspicious cross-border transactions following the violent “Gen Z movement” incidents of Bhadra 23 and 24, with investigators increasingly examining possible links between foreign funding, suspicious banking activity, organized crime, and potential terrorism financing.

According to official correspondence obtained by Fiscal Nepal, the Special Bureau of Nepal Police on Chaitra 22 sent letters to Nepal Rastra Bank and multiple commercial banks requesting detailed banking information of individuals deemed necessary for ongoing investigations.

The letter instructed banks and financial institutions to provide complete account details, including transaction histories, in soft-copy Excel format through designated official email channels. Police requested information including account ownership, date of birth, parental details, and addresses of targeted individuals.

Investigators say several of the individuals under scrutiny had previously been arrested multiple times by Nepal Police. Financial intelligence reports had also indicated that some of them received remittances and fund transfers from abroad under suspicious circumstances.

Security agencies are now examining whether certain financial flows could be connected to international terrorism networks, extremist financing channels, or organized criminal operations operating through Nepal’s financial system.

Terror Financing and Financial Intelligence Monitoring

The Special Bureau has been coordinating closely with the Financial Intelligence Unit (FIU) under Nepal Rastra Bank to monitor suspicious transactions entering Nepal and determine whether the money has links to criminal networks or extremist activities.

Apart from the Special Bureau, the Central Investigation Bureau (CIB) of Nepal Police has also been conducting parallel investigations into suspicious financial transactions, securities fraud, and money laundering cases with support from Nepal Rastra Bank.

Security officials said scrutiny increased significantly after the Gen Z-related unrest in Bhadra, when law enforcement agencies began examining financial activities of people allegedly involved in the protests as well as organizations registered under their names.

Following the formation of the government led under the political transition after the Sushila Karki-led administration, Home Minister Om Prakash Aryal had reportedly directed security agencies to investigate suspicious organizations and unexplained financial inflows.

Subsequently, police sought records from Nepal Rastra Bank and several commercial banks regarding individuals and organizations considered high-risk from a financial intelligence perspective.

Bank Account Leaks Trigger Political Fallout

The issue gained further national attention after personal banking details linked to former Home Minister Sudan Gurung became public in recent weeks.

Gurung resigned from office after his alleged connections surfaced with companies associated with Deepak Bhatta, who is currently under investigation in a money laundering probe.

As part of the investigation, police reportedly sought transaction details from multiple banks, including Nabil Bank, Prabhu Bank, Laxmi Sunrise Bank, and Himalayan Bank, regarding several individuals and organizations.

The securities-related investigation connected to Bhatta is currently being handled by the CIB, while the Department of Money Laundering Investigation is separately pursuing asset laundering allegations.

Although sensitive financial documents later surfaced publicly, the CIB has denied officially requesting Gurung’s banking records.

Foreign Funding Under Increasing Scrutiny

Nepal’s security agencies have long expressed concerns about opaque foreign funding entering organizations operating inside Nepal.

Officials say the legal framework governing transparency of foreign donations and institutional funding has historically remained weak, prompting attempts to amend related laws in recent years.

Despite legal reforms, investigators continue to monitor transactions considered suspicious or potentially linked to terrorism financing.

One major case involved the arrest of Prithvi Bahadur Shah, who was investigated on allegations of bringing illicit funds into Nepal through international fraud networks. Authorities alleged the money originated from fraudulent activities in the United States before entering Nepal’s financial system.

“After concerns emerged regarding transparency in foreign funding, legal amendments were initiated because existing laws became obstacles to effective monitoring. Police continue to investigate such matters periodically,” Home Ministry spokesperson Anand Kafle said.

Religious Organizations Also Under Scanner

Investigations have also extended to religious organizations receiving substantial foreign funding.

Police records indicate that churches, monasteries, madrasas, and several other religious institutions have received large sums of money from abroad over the years, prompting intelligence scrutiny.

Sources at the CIB said more than 50 religious institutions were investigated over the past five years after suspicious financial transactions were flagged.

In fiscal year 2075/76 alone, authorities reportedly received confidential complaints alleging suspicious foreign funding involving 21 religious organizations.

However, despite preliminary investigations, most cases failed to reach definitive conclusions.

Investigators found that institutions located both inside Kathmandu Valley and in other districts had received large cross-border transfers. Some orphanages and social welfare institutions were also included in the investigations.

“Whenever the Special Bureau identifies issues potentially connected to terrorism or suspicious financing, it monitors both individuals and organizations. After the Gen Z movement as well, we examined several entities,” a senior police official said.

The renewed investigations come at a time when Nepal’s financial system faces growing international pressure to strengthen anti-money laundering mechanisms, counter-terrorism financing enforcement, banking transparency, and oversight of foreign-funded institutions.