Currency Law in Nepal – Fake Money Law

Currency in Nepal is a Financial Instrument that can be used as a medium of Financial Exchange. Currency includes Notes, Money Orders, Checks, Drafts, Letters of Credit, Letters of Exchange, Bonds, Credit Cards, and other monetary instruments.

Counterfeit Money/Currency is unlawfully forged or produced Currency in Nepal that is made to appear as Genuine Currency issued by the Government of Nepal, Nepal Rastra Bank, or other recognized Foreign Authority.

Nepal has strict Criminal Laws to regulate Currency, fake Currencies, Bank Notes Transactions, and Currency Production. Chapter 22 Section 256 to Section 266 of the National Penal Code has provisioned for Offences Relating to Currency.

List of Currency Laws in Nepal

Counterfeiting of Money

Counterfeiting of Money or Currency has been prohibited in Nepal by Section 256 of the National Penal Code. The Act states that no individual can counterfeit or attempt to counterfeit Money or Currency in Nepal.

A person who commits or causes to commit the counterfeiting of currency in Nepal can be imprisoned with both Imprisonment and Fine. They can be imprisoned for a term of five to ten years and fined from NPR 50,000 to NPR 1,00,000. While deciding the Punishment, the Quantity and Value of the Counterfeit/Fake Money produced must be considered.

Usage of Counterfeited Money

Nepal has not only prohibited the production of Counterfeit Currency but the usage of Counterfeit/Fake Money/Currency. To be qualified as usage, it must include the following: Purchase, Sell, Import, Export, Transaction, and usage as genuine or attempt to use or possess such currency.

If individuals are convicted of using Counterfeit Currency in Nepal, they can be sentenced to Imprisonment for up to seven years and further fined up to NPR 70,000.

Instruments for Counterfeiting Currency

Section 258 has also imposed prohibitions on possessing, repairing, or making Instruments that can be potentially used to counterfeit Currency in Nepal.

The Crimes involve instruments of Counterfeiting making, Repairing, Purchasing, Giving, Taking, Exporting, Selling, Importing, or Possessing them.

However, it must be with the knowledge or reasonable belief that these instruments or materials are primarily intended for counterfeiting or Forging Currency.

An Individual involved in the Crimes provided above is liable to be imprisoned for a term of up to seven years and can be fined up to NPR 70,000.

Making Standard Less Currency

No Individual or Regulatory Body that is the legally competent authority that produces Currency in Nepal does the following:

1. Knowingly produce currency that doesn’t meet the standards set by the law.
2. Produce currency in a way that goes against the terms and restrictions defined for currency production.
3. Make currency in quantities exceeding the legal limits.
4. Engage in any activity to produce currency in a deviated manner.
5. Neither shall they benefit themselves or others from such actions nor facilitate such activities.

An Individual who carries out or causes to carry out the making of Currency contradicting the prescribed Standard can be imprisoned for up to seven years and fined up to NPR 70,000.

Currency Instruments Transport

Further, the Currency Law of Nepal prohibits transporting or taking away any equipment, machinery, or instrument through which Currency can be Produced. However, if a Competent Legal Authority causes such an order, it is lawful.

If any individual is convicted of taking Currency Instruments outside, they can be imprisoned for up to five years and fined up to NPR 50,000.

Altering Currency

Section 261 of the National Penal Code has prohibited diminishing the weight of Nepalese Currency or Altering the Prescribed Form of Currency.

For Coins, no individual can diminish the weight of the metallic coins or alter the chemical composition of the element.

Nonetheless, no individual is competent enough to Export, Possess, or Import Currency by duplicating one type of Currency as another to use it as Genuine.

Individuals who commit the crime stated above are liable to be imprisoned for a term not more than 5 years and fined not more than NPR 50,000.

Using Prohibited Currency

Currency Law in Nepal has prohibited from using or bringing into use of Prohibited Currencies. Section 262 provides that no individual can use Currency that has been considered illegal or banned by the Government of Nepal.

As detailed in the Act, no individual can use, possess, or exchange a currency into circulation that has already been banned by a competent authority prescribed in Law.

If an individual is convicted of using Prohibited Currency, such currency must also be forfeited from use. Further, the Offender is liable to either Imprisonment or Fine for using Prohibited Currency.

The Act states that they are liable to be sentenced for a term up to one year or fined up to NPR 10,000 or both the Sentences.

Misusing Torn Bank Notes

As Bank Notes have the potential of being Burned or Torn, they are usually replaced with New Notes by the Nepal Rastra Bank or other authorized Banks, if any. Therefore, no individual is allowed to burn a coin or banknote used as Currency in Nepal or melt or tear it making it incapable of being used. However, if a competent Authority provides such an Order, it is considered Lawful.

Moreover, no one is allowed to write or cross off Bank Notes in Nepal.

If an Individual Burns, Melts, or Tears Bank Notes/Coins or Writes on them, they can be imprisoned for a term not more than three months and they can be fined up to NPR 5,000.

Burning, Tearing, or Writing on Bank Notes

Individuals who have been authorized by competent Government Authority to burn or dispose of worn out/damaged Bank Notes must stay obedient to their Duty. These Individuals have been sanctioned for Re-Circulating Torn Off or disposable Bank Notes.

Individuals responsible for disposing of banknotes mustn’t be dishonest or in any form provide Banknotes to Another Person to gain undue Benefit.

If a person is convicted for misusing Torn Bank Notes in Nepal, they can be imprisoned for up to three years and can be fined not more than NPR

Statute of Limitation

The Statute of Limitation for reporting a complaint related to Currency Law in Nepal is one year from the Date of Knowledge of the Commission of Crime.