Authorities in Nepal have indicated a sharp rise in the number of Suspicious Transaction Reports (STRs) by banks in the country, largely linked to cyber-enabled frauds sometimes committed to cover gambling debts.
In the Strategic Analysis Report, 2024 on Cyber Enabled Fraud by the Financial Intelligence Unit of the Nepal Rastra Bank, findings indicated that the majority of individuals involved in committing cyber-enabled frauds (CEFs) were aged 19 to 30.
The group notes that ‘fraudsters commonly use multiple accounts opened in different Banks and Financial Institutions (BFIs) and Payment Service Providers (PSPs) under the same individual to collect illicit funds’.
The group notes that the majority of the CEF-related STRs are ‘victim reports and inquiries from law enforcement and investigative agencies’.
According to data compiled in the report, fraud was registered as one of the top 10 most registered crimes in fiscal 2022-2023, at 1,105 cases. Banking offenses were the highest most registered crimes, at 12,135.
During the period, the country’s Cyber Bureau – a special unit of the Nepal Police – received 9,013 complaints, a sharp rise from 4,638 in the previous fiscal year.
Of these, some 1,945 were related to IT fraud. These included phishing and a ‘lottery scam including alluring fraudulent offers of work from home and online shopping’.
Regarding amounts frozen by authorities linked to frauds conducted between 2017 and 2022, a total of $826,000 was frozen, while $160,000 was seized. Regarding bank offenses this figure rises to $741,000.
But while 29 fraud-related cases were registered at the Supreme Court of Nepal in fiscal 2022/2023, only one case resulted in a conviction, while two cases resulted in acquittals. In total, of some 495 fraud-related cases presented before the High Courts, only 153 resulted in convictions, while 163 ended in acquittals.
Looking at CEF, in fiscal 2022/23 some seven cases were prosecuted, involving 10 defendants. Only one case resulted in a conviction, while partial claims were sustained in three cases and one was resolved through mutual compromise.
One of the key transaction patterns identified in the report is ‘abnormal transaction activity in bank accounts and wallets including transaction with persons suspected of online gambling and illegal virtual assets transactions’.
