Finance Minister Announces Bill to Amend Banking Offense Act; Aims to Streamline Cheque Bounce Cases

Finance Minister Bishnu Prasad Paudel has announced that a Bill to amend the Banking Offence and Punishment Act-2064 BS has been registered in Parliament. The Bill seeks to enhance the investigation, prosecution, and punishment processes for banking offenses, including cheque bounce cases.

Addressing the Finance Committee of the House of Representatives today, Paudel highlighted the increasing reports of banking frauds and cheque bounce incidents. He noted that the Bill prioritizes fines for banking frauds, including cheque bounce, over imprisonment.

During the meeting, lawmaker Dr. Swarnim Wagle advocated for prioritizing fines instead of jail sentences, citing global practices and urging prompt passage of the Bill. Another lawmaker, Padam Giri, criticized the Parliament’s legislative process, pointing out the backlog of bills in the Committee.

The Bill, initially registered by former Finance Minister Dr. Prakash Sharan Mahat on September 2, 2023, aims to address various legal aspects related to cheque bounce. The proposed amendments include:

• If an account lacks sufficient funds for a cheque, it should be returned to the bearer.
• The bearer must be notified and given 30 days to ensure sufficient funds are available.
• Issuers are prohibited from writing cheques for amounts exceeding their deposits.

The existing Act provides for fines and up to three months of imprisonment for cheque bounce cases. The new Bill proposes a fine of 5% of the due amount and varying imprisonment terms based on the amount involved:

• Up to Rs 500,000: Up to one month
• Rs 1 million to Rs 5 million: Up to six months
• Over Rs 5 million: Up to two years

Additionally, the Bill allows the registration of cases at the District Court within three months if a cheque bounce case is proven.