Kathmandu, October 14
Nepal is preparing to establish a dedicated anti-scam centre bringing together the Nepal Rastra Bank, police, banks and financial institutions, payment service providers, internet service providers and telecommunications companies to tackle rising cases of online fraud.
The initiative comes as police receive between 200 and 300 complaints of cyber fraud daily, with victims often struggling to recover money because of delays in coordination among banks and law enforcement agencies.
Deepak Raj Awasthi, spokesperson for the Nepal Police Cyber Bureau, said the proposed centre was being developed at the initiative of Inspector General of Police Dan Bahadur Karki. The Ministry of Home Affairs has approved the proposal, and the centre could begin operations within a month if the Ministry of Finance approves the budget.
“The anti-scam centre is being developed as a mechanism in which the Nepal Rastra Bank, commercial and development banks, finance companies, major payment system operators and service providers, internet service providers and telecommunications companies will work together,” Awasthi said.
The centre is intended to operate separately from the Cyber Bureau, with representatives of relevant institutions working together around the clock. It will have a hotline and designated contact persons at participating organisations to facilitate immediate coordination.
Once operational, the centre will aim to identify and block bank accounts, phone numbers and websites used in scams, analyse suspicious transactions and initiate the process of returning money to victims once fraud is established.
Under the existing system, victims often have to complain to the bank where they hold an account, file a complaint with the Cyber Bureau and then request banks receiving the transferred money to freeze the funds. By the time these steps are completed, scammers may have transferred the money through several accounts and withdrawn it.
Awasthi said funds could move through as many as four bank accounts within a minute, making rapid coordination essential.
“Currently, only around 10 per cent of the money lost to scams is recovered. The centre is being planned with the goal of freezing the money within 10 minutes,” he said.
The proposed system would allow authorities to trace transfers between accounts more quickly. Awasthi said collecting details of transactions moving from one account to another could currently take as long as five months in some cases.
The centre also plans to prepare case files with relevant information and forward them to the authorities in the districts where victims are based. Its initial focus will be on freezing funds linked to fraud involving banks and financial institutions, with internet service providers brought in when necessary.
Central bank suggests AI-based mechanism for resolving cases
During discussions on the proposed centre, Nepal Rastra Bank representative Sushil Paudel suggested exploring an artificial intelligence-based mechanism to help resolve disputes and facilitate the return of money lost to fraud.
Paudel said conventional court proceedings could be lengthy and cumbersome, while cyber-fraud cases often involve recurring patterns that could make them suitable for AI-assisted assessment.
He said banks also agreed on the need for clearer and faster procedures to establish whether money had been obtained through fraud and determine how it should be returned to victims.
However, the proposal would need to be developed further to clarify its legal basis and the role of any AI-based system in decisions involving financial disputes.
Paudel also stressed the importance of financial awareness alongside stronger technological infrastructure, noting that financially literate people could fall victim to scams because of attractive offers, while others might be deceived while using ordinary financial services.
Existing law may not be enough to recover funds
Section 52 of Nepal’s Electronic Transactions Act, 2006, provides for the recovery of financial benefits obtained through fraud and their payment to the affected party, along with penalties of up to Rs 100,000, imprisonment for up to two years, or both.
However, police officials and bankers say the existing legal framework does not adequately clarify the procedures for returning money transferred through scam-related transactions across multiple bank accounts. They say the central bank needs to introduce clearer provisions to facilitate the recovery of funds.
According to Awasthi, several countries have established dedicated anti-scam centres as online fraud has increased internationally. Nepal is now pursuing a similar model, combining a hotline with an integrated information system.
Initially, the centre will use a hall at the Cyber Bureau’s new building, where representatives of the participating institutions will coordinate in person. Once the information system is developed, the same coordination could also take place virtually.
Awasthi said victims should be able to contact the hotline as soon as they realise they have been scammed, allowing the relevant bank to be contacted immediately to block suspicious funds before they are withdrawn.
International hacking incidents will remain outside its scope
The proposed centre will focus on domestic online scams and fraud, rather than sophisticated international hacking incidents, Awasthi said.
Cases involving unauthorised access to computer systems or attacks on a bank’s SWIFT payment network would continue to be handled by the Cyber Bureau and relevant cybersecurity agencies.
Sections 45 and 46 of the Electronic Transactions Act address unauthorised access to computer systems and acts intended to damage computer systems or information systems.
Awasthi said Nepal Rastra Bank was also working to establish a Financial Computer Emergency Response Team (Financial CERT) to respond to cybersecurity incidents involving the financial sector. If that mechanism is not established, authorities could coordinate with the Computer Emergency Response Team under the Ministry of Communication and Information Technology and the National Cyber Security Centre.
He said a dedicated response mechanism would help relevant agencies react more quickly to technical incidents, while the proposed anti-scam centre would concentrate on stopping the movement of money obtained through online fraud.
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