Formal remittance rises, but Hundi remain widespread in Nepal

Kathmandu: Despite an increase in remittance inflows through formal channels, illegal Hundi transactions remain widespread in Nepal. Between July and December 2025, Nepal Police arrested 12 individuals and seized Rs 11.5 million linked to Hundi operations. Although the government offers incentives such as a one-percent higher interest rate for remittances sent through banks, informal transfers persist. Over the past seven years, authorities have detained 279 people with Rs 35.644 billion in undocumented cash. Studies indicate that 41 percent of Nepal’s economy remains informal. While formal remittance inflows reached Rs 870.31 billion in five months, continued Hundi activity is slowing Nepal’s progress toward removal from the FATF grey list.