Nepal Supreme Court Scraps Mandatory National ID Requirement for Banking Services

Nepal’s Supreme Court has struck down a provision requiring customers to present a National Identity Card or its number when accessing key banking services, including operating bank accounts, updating Know Your Customer (KYC) details, and changing registered mobile numbers. A joint bench of Justices Sapana Pradhan Malla and Megh Raj Pokharel issued a writ of certiorari, invalidating the mandatory provision introduced through Nepal Rastra Bank’s Unified Directives. The central bank’s directive had established the National Identity Card or its number as the sole basis for verifying customers’ identities for the specified banking services. However, the Supreme Court has also issued a mandamus directing the concerned authorities to provide banking services using citizenship certificates and other identification documents until customers obtain their National Identity Cards or identification numbers. The writ petition was filed by advocate Sarita Adhikari, a permanent resident of Ward No. 1 of Phungling Municipality in Taplejung district who currently resides in Kathmandu. The petition named the Office of the Prime Minister and Council of Ministers, the Ministry of Home Affairs, the Department of National ID and Civil Registration, Nepal Rastra Bank, and Nepal Investment Mega Bank as defendants. According to the petition, making National Identity Cards compulsory for banking transactions had created difficulties for millions of ordinary citizens across the country. Elderly people, persons with disabilities, and individuals without adequate access to technology were among those reportedly facing barriers to operating their own bank accounts and accessing essential financial services. The court’s decision seeks to ensure that the lack of a National Identity Card does not prevent citizens from accessing banking facilities when alternative identification documents are available. The ruling also highlights the importance of balancing identity verification requirements with financial accessibility, particularly for vulnerable groups and people who have yet to obtain their national identification documents. The judgment marks a significant development in the implementation of Nepal’s national identification system within the banking sector, allowing eligible customers to rely on alternative identity documents under the court’s order rather than being denied services solely because they lack a National Identity Card or its number.