Himal Press 
KATHMANDU: Nepal Rastra Bank (NRB) has issued a working procedure for licensed banks and financial institutions to deal with the dishonor of checks.
Issuing the Working Procedure for the Dishonor of Checks, 2025, on Thursday, the NRB stated that banks and financial institutions must certify dishonored checks at the request of the bearer if the check cannot be cashed due to insufficient funds. Under the new rules, if a bank or financial institution receives a check for payment but the account lacks sufficient funds, it must state this reason and return the check to the bearer. However, if the bearer wishes to get the dishonor certified, the bank or financial institution, within a maximum of 45 days, must notify the issuer to deposit the required funds.
“The bank or financial institution must also maintain a record of this notification. After recording the notification, the same reason must be briefly mentioned on the check and the check should be returned to the bearer,” the procedure states.
Banks will have to certify the check as dishonored if the issuer’s account still lacks sufficient funds to honor the check after 45 days and return the check to the bearer within three days. If a check bounces due to insufficient funds in the issuer’s account, the issuer may be blacklisted, as per the consolidated directive issued by the central bank on Thursday. “The issuer can still face blacklisting if there is sufficient balance but the check is returned for reasons other than the holder’s ability to verify the details on it,” the new provision states.
To initiate blacklisting, the bearer must file an application with the concerned bank or financial institution within six months from the date the check was officially certified as dishonored. As per the new provision introduced through an amendment to its consolidated directives on Thursday, banks and financial institutions must notify the Credit Information Bureau (CIB) within five working days of receiving a valid blacklisting request. The blacklist may include the individual who signed the check, the firm, company, or organization that issued it, and related parties.
Additionally, in cases where a check is returned for reasons other than the bearer’s ability to confirm its details, banks must notify the issuer, providing a seven-day window (excluding public holidays) to settle the amount. “If the issuer fails to make the payment within that period, the bank must notify the Credit Information Bureau at the bearer’s request for blacklisting,” the central bank said.
The central bank has also introduced a provision for removing names from the blacklist. “If the issuer pays the check amount to the bearer, earmarks the amount for payment, or resolves the matter legally under prevailing laws and informs the relevant bank or financial institution, their name can be removed from the blacklist,” it added.
