Nepal Tightens Gold Trade Rules: KYC Required for Purchases Over Rs 5 Lakhs

The Inland Revenue Department (IRD) has introduced stringent measures to curb money laundering and terror financing within the precious metals and gems sector. Under the newly issued “Directive on Anti-Money Laundering and Combating the Financing of Terrorism, 2025,” the government has significantly lowered the threshold for mandatory customer identification.

Previously, a Know Your Customer (KYC) profile was only required for transactions exceeding Rs 10 lakhs. This limit has now been slashed to Rs 5 lakhs. Under the new rule, both buyers and sellers must provide full personal details, including a three-generation family history and official identification (such as a Citizenship Certificate or National ID).

Furthermore, any transaction exceeding Rs 10 lakhs must now be conducted exclusively through the banking system (cheques, drafts, or digital payments). Cash transactions above this limit are now deemed illegal, and jewelers are prohibited from accepting payments into personal accounts, mandating the use of official firm accounts.

The directive also places “High-Value” and high-ranking officials under special surveillance, requiring businesses to verify their sources of income. Failure to comply with these regulations carries heavy penalties, ranging from a fine of Rs 1 crore to the cancellation of business registration. While the government aims to increase transparency and prevent the flow of unexplained wealth, small-scale jewelers have expressed concerns regarding the technical complexities of implementing such a rigorous reporting system.