Cheque bounce cases surge in Kathmandu Valley

Kathmandu, Feb. 7: There has been a significant rise in banking fraud cases. Police reports indicate that up to 45 cheque bounce complaints are filed daily at the Kathmandu Police Office in Bhadrakali, showing a growing trend of banking offences in the Valley. This trend has also been spreading across the country.

Because of the increasing number of such offences, the Kathmandu Police has established a Banking Fraud Branch led by a DSP (Deputy Superintendent of Police) to register and investigate complaints.

Speaking at a press conference, Additional Inspector General (AIG) and Chief of Kathmandu Valley Police Office, Ranipokhari, on Wednesday, Tek Bahadur Tamang, said after a complaint is registered on banking or cheque bounce case, the accused and the complainant are first called for discussion, and if there no settlement, the case proceeds legally. "The Valley Police Office doesn't do this legal process, but the Kathmandu District Police Range is the sole police unit, which is provided authority to investigate and lodge file under financial crime for the Valley," said AIG Tamang. 

Cheque bounce cases in Kathmandu are handled by the Kathmandu Police Range, Bhadrakali. While 14 police circles (led by DSPs) in the Valley have been given legal authority to handle banking fraud cases, the Metropolitan Police Office has assigned dedicated officers to centralise these investigations.

Control measures

On June 21, 2023, the Council of Ministers had decided that all district courts would handle banking fraud cases. Previously, such cases were initiated only in high courts, making it difficult for districts outside the valley to process them due to geographical constraints. 

As a result, there were very few banking fraud cases filed in rural districts. However, after the government's decision, cheque bounce case registrations have surged in districts as well.

At Kathmandu Police Range, a 14-member police team led by DSP investigates cheque bounce cases.

When a complaint is filed, the police first attempt to contact the accused via phone and urge them to settle the financial issue. If they do not respond, an SMS is sent, stating that a cheque bounce complaint has been filed and that legal proceedings will follow if they do not cooperate.

"We give them time to respond. If they ignore it, we notify them via message," said SSP and Spokesperson Shekhar Khanal for the Kathmandu Valley Police Office, said at the press conference. 

In fiscal year 2021/22, Kathmandu Police received 6,241 cheque bounce complaints. After mutual understanding, only 4,144 cases proceeded for legal action. In these cases, 704 persons were arrested.

In Fiscal Year 2022/23, out of 9,802 complaints, 8,251 cases were registered.

In Fiscal Year 2023/24, 7,621 total banking fraud cases were registered out of 9,634 total complaints. Similarly, as of February 2, 2025 from mid-April, 2024, Kathmandu Police had already registered 3,877 banking fraud cases, according to the data presented at the press meet on Thursday.

Statistical data shows that Kathmandu district has the highest number of banking fraud cases, with nearly double the cases compared to the previous fiscal year. In the year 2022/23, in Kathmandu 3,711 total banking cases were registered, 186 in Lalitpur and 247 in Bhaktapur districts. Likewise, in the year, 2023/24, 7,101 cases were registered in Kathmandu, 444 in Lalitpur and 706 in Bhaktapur. In the year, 2024/25, 2,613 cases were registered in Kathmandu, 339 in Lalitpur and 530 in Bhaktapur.

In the last 10 months from mid-April, 2024 to February 2, 2025, police registered 3,877 cases and of them, 3,234 were registered in Kathmandu, 534 in Bhaktapur and 109 in Lalitpur.  

Reasons for increasing banking fraud

In the past 10 months, over 2,300 people across Nepal have been arrested under banking fraud. 

In financial transactions, people commonly use cheques as a mode of trusted transaction. They are used for land transactions, sending money abroad, and various deals. However, problems arise when the cheque payment date arrives and the balance in the account is insufficient.

Account holders most often issue back date cheque to repay their 

loan or whatever, and when the problems arise when the cheque bearer cannot withdraw money as written in the cheque. 

If a cheque bounces, the complainant can directly file a 'cheque dishonour' case in the court. However, since court proceedings involve additional fees (lawyers and court costs), many victims prefer to report to the police first, seeking the accused’s arrest.

According to SSP Khanal, economic instability and mistrust in transactions have fueled the increase in banking fraud cases. 

Legal process 

When a cheque bounces three times, it is considered strong evidence in court. According to the police, over 90 per cent of banking fraud cases become successful in favour of victims because courts accept bounced checks as primary evidence.

Since cheque bounce cases fall under criminal law, they are resolved quickly. If the accused is present, a final verdict is usually given within six months.

Emphasis on banking education

Officials involved in the investigation state that a lack of banking education has resulted in the rise in cheque bounce cases. They argue that banks should educate their customers about the legal consequences of issuing cheques without sufficient funds, as it can lead to criminal charges.

An officer from the Kathmandu District Police Office said, "It is necessary for banks to educate their customers about the liabilities that arise after issuing a cheque."

According to the Banking Offenses and Punishment Act-2007, individuals involved in such offences can be penalised with a fine equivalent to the bounced amount and up to three months of imprisonment.