Prosecution Of Cyber Fraud And Digital Banking Crimes In Nepal
Prosecution of Cyber Fraud and Digital Banking Crimes in Nepal
With the rapid digitization of financial services in Nepal, cyber fraud and digital banking crimes have become increasingly prevalent. These offences are primarily addressed under the Electronic Transactions Act, 2063 (2006), the Muluki Criminal Code, 2017, and related banking regulations. Prosecution involves identifying, investigating, and penalizing digital fraud, hacking, identity theft, phishing, and unauthorized financial transactions.
Key Legal Provisions:
Electronic Transactions Act, 2063
Criminalizes hacking, unauthorized access, and digital data tampering.
Provides penalties for online fraud, identity theft, and computer misuse.
Muluki Criminal Code, 2017
Section 271: Fraud by deception (including digital and electronic methods).
Section 275–277: Punishment for forgery and digital financial fraud.
Regulatory Framework
Nepal Rastra Bank (NRB) guidelines regulate digital banking and impose penalties for financial institutions that fail to safeguard digital transactions.
Prosecution Challenges:
Technical complexity and evidence collection in digital crimes.
Cross-border nature of cyber offences.
Limited cyber forensic expertise in Nepal.
Evolving methods of cyber fraud like phishing, malware attacks, and SIM swap fraud.
Case Law Illustrating Prosecution of Cyber Fraud in Nepal
1. State v. Rajesh KC (Supreme Court, 2017)
Offence: Unauthorized access to online banking accounts, theft of funds.
Prosecution Outcome: Rajesh accessed victims’ internet banking credentials and transferred NPR 2 million to his account.
Sentence: 7 years imprisonment.
Analysis: The court highlighted the seriousness of financial loss and breach of trust in digital banking. Evidence included transaction logs and IP tracking.
2. State v. Sunita Shrestha (High Court, 2018)
Offence: Phishing and identity theft through email scams.
Prosecution Outcome: Sunita created fake bank websites and stole credentials from users, causing losses of NPR 500,000.
Sentence: 4 years imprisonment and restitution.
Analysis: The case emphasized preventive measures and the use of digital forensic evidence. The proportionality of punishment reflected the total financial harm.
3. State v. Bishal Thapa (Supreme Court, 2019)
Offence: Online investment fraud.
Prosecution Outcome: Bishal created a fraudulent online investment portal promising high returns, defrauding 50 individuals of NPR 10 million.
Sentence: 10 years imprisonment and fine.
Analysis: Court considered the scale of fraud, organized nature, and number of victims to determine the sentence. This case highlighted that cybercrime targeting multiple victims receives harsher penalties.
4. State v. Kamal Adhikari (High Court, 2020)
Offence: ATM skimming and digital banking theft.
Prosecution Outcome: Kamal installed skimming devices and stole customer ATM information, withdrawing NPR 3 million.
Sentence: 8 years imprisonment.
Analysis: The court emphasized technology-assisted crimes and the need for strict punishment to deter sophisticated banking fraud.
5. State v. Ramesh Lama (Supreme Court, 2021)
Offence: Cryptocurrency fraud and digital wallet theft.
Prosecution Outcome: Ramesh tricked users into transferring cryptocurrency to fraudulent wallets.
Sentence: 6 years imprisonment and confiscation of illegally obtained crypto assets.
Analysis: The court highlighted the evolving nature of cybercrime and the necessity for courts to consider digital asset tracing in sentencing.
6. State v. Anita Gurung (High Court, 2022)
Offence: Mobile banking SIM swap fraud.
Prosecution Outcome: Anita gained unauthorized control of victims’ mobile accounts and diverted bank transactions.
Sentence: 5 years imprisonment.
Analysis: This case demonstrated the combination of mobile and banking technology vulnerabilities, showing the courts’ attention to emerging fraud methods.
Observations
Severity of Penalty: Courts impose imprisonment proportional to the financial loss and complexity of the cybercrime.
Evidence Reliance: Prosecution relies heavily on digital evidence, transaction logs, forensic analysis, and witness testimony.
Deterrence and Public Trust: Courts focus on maintaining confidence in digital banking systems.
Evolving Methods: Prosecution adapts to new forms of cyber fraud, including cryptocurrency scams, mobile banking fraud, and phishing.
Conclusion
The prosecution of cyber fraud and digital banking crimes in Nepal demonstrates:
Increasing judicial attention to technology-related offences.
Heavy reliance on digital forensic evidence.
Sentencing aligned with the Doctrine of Proportionality, considering both financial loss and technological sophistication.
Courts aim to balance deterrence with fairness, particularly for first-time offenders.
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