Kathmandu: Nepal Rastra Bank has introduced new provisions governing the payment of “account payee” cheques in a move aimed at strengthening transparency and discipline in government transactions. The central bank’s Banking Department issued a circular to the Office of the Financial Comptroller General, along with all government bodies and banks and financial institutions, outlining the updated rules.
Citing the Government Transactions Directive 2019 (Second Amendment 2024), the central bank has made it clear that any “account payee” cheque issued in the name of a government office or institution must now be deposited strictly into the bank account of that same entity. Funds can no longer be redirected to another account under any circumstances.
Previously, it was common practice for a government office to endorse a cheque, by stamping and signing it, and transfer it to the account of the Financial Comptroller General or another government fund. The new directive completely halts this practice. From now on, banks are prohibited from crediting cheque amounts to any account other than that of the named beneficiary.
The circular specifies that cheques received through the clearing system must be credited exclusively to the account of the individual or institution mentioned on the cheque. For instance, cheques issued in the name of the Federal Secretariat Construction and Management Office or China State Construction Engineering Corporation must be deposited only into the respective accounts of those entities. If a bank is asked to process a cheque in violation of this rule, it is not obligated to honour it.
When depositing cheques issued in the name of a government office, the reverse side of the cheque must carry an official and identifiable stamp of the concerned office. However, this stamping requirement does not apply to individuals, firms, or private companies.
The central bank stated that the stricter measure has been adopted in line with the Negotiable Instruments Act 1977 and its Unified Directives 2025 to enhance the security of “account payee” cheques. The move is understood to be aimed at minimizing errors and reducing risks in sensitive transactions involving government funds, such as budget allocations, grant reimbursements, or security deposits.
In its circular, Nepal Rastra Bank has also instructed commercial banks and financial institutions not to collect or process any cheque that fails to comply with the new provisions, underscoring its commitment to tighter financial governance in public sector transactions.
Comment Here