This article discusses counterfeiting, altering, and misusing currency, as well as currency law in Nepal.
Introduction to Currency and Its Importance
Currency plays a vital role in finance. It is a tool for facilitating trade and financial activities and also a medium of exchange.
Cash notes and coins are not the only form of currency. It also consists of checks, drafts, LCs, bonds, credit cards, and much more. To maintain economic stability and public trust, securing originality and integrity is crucial.
What is Counterfeit Currency?
Counterfeit currency refers to unlawfully produced or forged money that is made to appear like genuine currency issued by the Government of Nepal, Nepal Rastra Bank, or any recognized foreign authority.
The production, usage, and distribution of counterfeit money are serious crimes in Nepal, governed by strict laws designed to protect the nation’s economy.
Standards for Currency Production
Making Standard Less Currency
Only legally authorized bodies are allowed to produce currency in Nepal, and they must adhere to strict standards.
The production of currency that lacks these qualities, exceeds legal boundaries, or deviates from recommended methods. Individuals who knowingly produce low-standard currency can be imprisoned for up to seven years and fined up to NPR 70,000.
Transporting Currency Instruments
Without the authorization of the competent legal authority, transportation of any machinery, equipment, or instruments that are used for the production of currency is prohibited.
Breaking this law can result in up to five years of imprisonment and a fine of up to NPR 50,000.
Legal Provisions Against Counterfeit Currency
Counterfeiting Money
Under Section 256 of Nepal’s National Penal Code, counterfeiting money is explicitly prohibited.
Imprisonment for 5 to 10 years and a fine of up to Rs. 50,000 to Rs. 100,000 is faced by people who are found guilty of counterfeiting currency. The quantity and the value of such money produced are taken into consideration while deciding the punishment.
Usage of Counterfeit Money
Nepalese law not only prohibits the production of counterfeit currency but also its usage. Using counterfeit money includes activities like purchasing, selling, importing, exporting, and transacting with fake money, or even attempting to use or possess such currency.
If convicted of using counterfeit money, an individual can be sentenced to up to seven years in prison and fined up to NPR 70,000.
Instruments for Counterfeiting Currency
Section 258 of the National Penal Code addresses the possession, repair, or making of instruments that can be used to counterfeit currency.
It is illegal to possess, purchase, give, take, export, sell, import, or repair any instruments or materials intended for counterfeiting currency. Individuals involved in such activities can be imprisoned for up to seven years and fined up to NPR 70,000.
Altering and Misusing Currency
Altering Currency
Section 261 prohibits diminishing the weight or altering the prescribed form of Nepalese currency. This includes reducing the weight of coins or changing the chemical composition of the metal.
It is not legal to import, export, or keep the altered currency. Breaking the law can result in imprisonment for up to 5 years and a fine of up to Rs 50,000.
Using Prohibited Currency
Section 262 states that it is prohibited to use or circulate any currency specified as illegal by the Government of Nepal.
Keeping, using, or exchanging these currencies may result in imprisonment for up to one year and a fine of up to NPR 10,000.
Misusing Torn Bank Notes
Banknotes that are burned, torn, or otherwise damaged are usually replaced by the Nepal Rastra Bank or other authorized banks.
It is not legal to burn, melt, tear, write on, or cross off banknotes in Nepal without permission from the competent authority. Individuals who misuse torn banknotes can be imprisoned for up to 3 months and fined up to NPR 5,000.
Responsibilities of Authorized Individuals
Authorized individuals tasked with disposing of damaged banknotes must do so honestly and without recirculating them for personal gain. Misusing this responsibility can result in imprisonment for up to three years and a fine.
Statute of Limitations
The statute of limitations for reporting a complaint related to currency law violations in Nepal is one year from the date of knowledge of the crime.
Conclusion
Currency law in Nepal encompasses various aspects of currency production, usage, and protection against counterfeiting. These laws ensure that the economic system remains stable and that public trust in the financial system is maintained.
Violating these laws carries severe penalties, reflecting the seriousness with which Nepal treats currency-related crimes.
Also Read: Tax Laws in Nepal
