NRB tightens “account payee” check rules for government transactions

The Nepal Rastra Bank (NRB) has introduced stricter provisions governing “Account Payee” checks used in government-related financial transactions. Under the Government Transaction Directive, 2019 (Second Amendment 2024), checks issued in the name of a government office or company must now be deposited only into the bank account of the specified payee. The earlier practice of endorsing checks for transfer to other accounts has been discontinued. Financial institutions have been instructed not to clear any check if the account holder’s name does not match the payee specified on the check. The rule aligns with the provisions of the Negotiable Instruments Act and is intended to reduce risks associated with the handling of government funds.