Election Commission mandates strict Banking procedures for campaign financing

Kathmandu, Feb. 4: In an effort to bolster fiscal transparency and accountability during the upcoming parliamentary elections, the Election Commission of Nepal has implemented the ‘Procedures on Election Campaign for Parliamentary Member - Bank Account (Account Handling and Management) 2082’. 

The new directive mandates that all political parties and candidates must channel their election-related financial activities through dedicated bank accounts, ensuring a traceable and regulated flow of campaign funds.

Transparency is further enforced by the requirement that all transactions must be conducted in Nepali currency. Any expenditure for campaigning—including payments for podiums, rallies, or publicity—must be made via cheques, drafts, electronic means, or other negotiable instruments.

While parties and candidates can accept donations, there are strict thresholds and ‘no-go’ sectors. Any assistance exceeding Rs. 25,000 from a citizen or an organisation must be deposited directly into the campaign bank account. For donations exceeding Rs. 100,000, the recipient is legally bound to record the donor’s name, address, occupation, Permanent Account Number (PAN), and the source of the funds, including a declaration of its tax status.

The EC has barred the political parties and candidates from raising financial aid from several sectors, including government agencies at all levels, institutions with full or partial government ownership, public limited companies that issued the Initial Public Offering, and educational institutions like universities and schools. 

Likewise, they can’t collect funds from national and international non-government organisations, foreign governments, foreign institutions or foreign individuals, and anonymous donors or undisclosed entities. 

Under the new regulations, political parties and individual candidate are required to submit their applications to the EC in a prescribed format. The political parties must provide an official letter from the party, and the candidates must provide evidence of their candidacy or a valid identity card. 

They must also submit a signature specimen card from the chosen financial institution and a copy of the Nepali citizenship certificate of the person(s) designated to operate the account.

Once the EC verifies these documents, it will issue a formal recommendation to the bank to open the account, notifying the Treasury and Accounts Controller Office and Election Offices to ensure oversight from the outset.

As per the procedures, a political party's account must be operated by a maximum of two officials designated by the party, requiring joint signatures for all transactions. For individual candidates, the account can be managed by the candidate themselves or an authorised representative, either through a single signature or joint signatures of up to two people.

Monitoring and Closure

The chief of the relevant Treasury and Accounts Controller Office has been tasked as the Election Code of Conduct Monitoring Officer. Their role involves continuous surveillance to ensure that public property is not misused and that campaign spending remains within the limits set by the EC. 

Following the conclusion of the election, candidates and parties must make their expenditure details public and submit a report to the Election Office. The EC will then order the closure of the bank accounts within 35 days of the final report's preparation. 

However, in a bid to maintain a long-term audit trail, all bank account records must be securely preserved for a minimum of six years, according to the procedures.

Joint Spokesperson of the EC Kul GC expressed his confidence that these new procedures will help to enhance transparency in election financing, both raising funds and expenditures. 

“We want to set a new good culture in election financing. This is the starting point. But the EC would put its efforts through the election and treasury offices in better monitoring the mobilisation of the funds,” said GC.