Section 7L: Liability For Wire Transfers

1) The financial institution will have to correctly identify and verify the customer by taking the details and information under the following before making a wire transfer of any currency or any amount in accordance with the prevailing law:

(a) The name of the manufacturer,

(b) The account number of  the originator and a separate source number by which the transaction may be identified in the event of non-account,

(c) The address of the originator or, in the absence thereof, the date and place of birth or citizenship number or national identity card number or customer identification number,

(d)  The name and account number of the beneficiary and a separate source number from which the transaction can be identified in case of non-account,

(e) The regulatory body may prescribe such other particulars or information.

Explanation: For the purposes of this clause, “originator” means the actual person sending the money through wire transfer.

2) The provisions of sub-section (1) shall also apply to the transfer of wire deposited in a watch file.

3) The provisions of sub-sections (1) and (2) shall not apply to wire transfers resulting from the purchase of goods or services by debit card, credit card or prepaid card as shown on the transaction card and to wire transfers between financial institutions to their accounts.

4) If the originator or beneficiary is an existing customer, the financial institution may not identify and satisfy the customer in accordance with sub-section (1) if it is satisfied that the financial institution is confident that there is no risk of default in the transactions carried out by it and that it has correctly identified and satisfied the customer.

5) The financial institution may not take the details or information under clause (c) of sub-section (1) while making a wire transfer of the customer’s value of seventy-five thousand rupees or less.

6) The financial institution shall enclose the particulars pursuant to sub-section (1) with the payment message under the payment chain or wire transfer to the financial institution making the payment.

7) Any financial institution of Nepal acting as an intermediary or making payment shall ensure that the details pursuant to sub-section (6) are received.

8) If the required documents or details pursuant to sub-section (7) are not found, the financial institution shall send the amount or demand it from the financial institution under the payment chain.

9) In the event of non-receipt of the details sought pursuant to sub-section (8), the financial institution of Nepal, which is the payer or acting as the conduit, may suspend, refuse or disallow such wire transfer based on the policies and procedures pursuant to sub-section (10).

10) According to the existing law, Nepal’s financial institution dealing with wire transfers will have to implement a risk-based policy and procedure regarding the monitoring of wire transfers, inquiry, suspension, rejection, identification of the real rich and beneficiaries, payment, etc.

11) The financial institution shall make necessary monitoring to ensure that the details of the originator or beneficiary are not provided by this section when dealing with wire transfers.

12) The financial institution handling wire transfers of seventy-five thousand rupees or more must correctly identify the beneficiary when paying the amount.

13) The financial institution sending money or value through wire transfer, acting as a conduit and making payment, shall preserve all records and details relating to wire transfer for at least five years from the transaction date.

14) A financial institution that sends money or value by wire transfer acts as a conduit or facilitator of payment. The amount of the person, group or organisation should be immediately withheld, and no one should be allowed to transact.

15) The financial institution dealing with wire transfers shall make the following arrangements concerning its agent:

(a) To implement the program for the prevention of financial investment in asset laundering and terrorist activities and to monitor its compliance or non-compliance,

(b) To prepare updated details of the agent and publish it publicly on the website.

16) The National Bank will be able to make more necessary and appropriate arrangements regarding wire transfers.