implement such directives related to aml / cft. ( for instance, the financial penalty that normally applies for noncompliance ranges from one to fifty million rupees. ) ladies and gentlemen, 5. money laundering can take different forms, and is not limited to tax evasion, cybercrime, identity fraud, phishing, card fraud, skimming, advance fee scams, fund transfer schemes, fake prizes, international lottery fraud, wills and legacies and loan fraud and international transfers etc. the technologies adopted by bfis are making them increasingly vulnerable to various risks in money laundering. generally, vulnerability to money laundering is greater when there is inadequate internal control system, poor risk management practices, weak good governance, inadequate board and senior management oversight, inadequate policy, procedure and monitoring the functional activities and breach of contract and trust etc. although the banking system is stringent in know your customer ( kyc ), it is not sufficient as expected to identify the beneficial owner and to apply the risk based approach. nrb has observed that money laundering is largely the result of weak internal control and poor risk management and practices of the respective banks. this highlights the need of efficient internal audit, strong internal control system and better risk management practices within the bfis in addition to compliance to regulation and supervision for prevention, control and detection of financial crime. 6. bfis must adopt strategic approach and also comply with the kyc regulations based on risk based approach, real time transaction monitoring and transaction analysis for prevention and timely detection of financial crimes. the board and senior management of bfis should be proactive in understanding the potential risks and also put in place a crime prevention, control and detection mechanism. they should have a deep understanding of the institution ’ s strengths and weaknesses and be able to move their respective bfi in right direction. the prevention and corrective measures should also be a key concern to minimize the impact of financial loss that impact our economy. ladies and gentlemen, 7. nepal has established legal and institutional foundation to comply with aml / cft standards. the whole of the legal and organizational framework of aml / cft revolves around fatf's 40 recommendations. in that regard, nrb has been extensively working to strengthen its legal and organizational framework. in this regime bfis can play a very important role, not just because launderers have been abusing the financial system but also because as victim of such crimes, they are always at various risks such as legal,

nepal investment summit 2017 special address by dr. chiranjibi nepal, governor, nepal rastra bank 3 march 2017 mr. chair of the session, distinguished panelists, esteemed guests, media persons, ladies and gentlemen, 1. it gives me an immense pleasure to be here to address this session on “ financial institutions / alternative investments : creating value for money. ” we have organized this summit at a time when the nepalese economy is striving for attaining higher growth and tracing the path for sustainable development. the recent data show a rebound in economic activity. all three major sectors of the economy ; agriculture, industry and services are on the mode of recovery after the lackluster performance last year. the expected rebound reflects the resilience of the nepalese economy to major shocks that it had to bear last year. 2. our macroeconomic fundamentals are sound. this is reflected in a low inflation and balance of payments surplus. the country has adequate level of foreign exchange reserves for meeting country's near and medium - term international obligations. the current macroeconomic and financial situation is supportive for the pursuit of nepal's huge growth potential going forward. 3. nepal has an immense potential in its geography and location. it has a wider scope in developing hydropower, ict, irrigation, health, education, industrial estates, urban development, drinking water and sanitation, electricity transmission lines and agro - processing as well as herbal industries. the nepalese financial sector has also reached a stage of its potential tapping for major investments in these areas. 4. we have national aspiration and international commitment for upgrading our status from the ldc to the developing country by 2022 and achieving the sustainable development goals and graduating to the middle income country status by 2030. for this, the role of financial institutions and alternative investments could be vital for upgrading country's economic status and creating the value for money through investment. 5. the resource that the nepalese financial system has at present is sufficient to meet the working capital need of the infrastructure projects. however, we need foreign investments for the execution and completion of the large projects. 6. the ongoing fourteenth development plan has accorded higher priority to the private sector in managing investment requirement. of the total investment requirement of rs. 2425 billion in the fourteenth plan period, around 55 percent is expected from the private sector. tapping foreign investors and the nepalese financial system is crucially important for meeting the targeted investment by the private sector. ladies and gentlemen,