NRB to establish a centralized customer identification system

Nepal Rastra Bank (NRB) plans to launch a Centralized Customer Identification System (KYC) to streamline the exchange of customer identity data among banks and financial institutions. This new mechanism, modeled after the Credit Information Center, will centralize and manage customer identity information across the financial sector.

Ramu Paudel, NRB Spokesperson revealed that discussions are ongoing regarding the system’s structure, operational model, and investment. “We are finalizing details, and implementation will follow once confirmed,” Paudel said.

The initiative aligns with the Prevention of Money Laundering Regulation-2081, allowing financial institutions to use electronic government records, such as citizenship and national identity cards, for customer verification. However, Paudel emphasized that these documents alone are insufficient for comprehensive KYC processes, highlighting the need for a dedicated structure.

Currently, customers must submit KYC information separately for each institution. The centralized system will simplify this by enabling banks to access updated customer data from a single database, reducing redundancy and improving efficiency.

Inspired by India’s Central Customer Identification System, NRB aims to replicate its success while addressing challenges in Nepal’s financial and securities sectors, where KYC adoption remains limited.