October 30: Nepal Rastra Bank is preparing to instruct banks and financial institutions to purchase cyber security insurance policy. Nepal has insurance policy on cyber security but none of the banks have purchased such policy.

Nepal Insurance Company has introduced Cyber Risk Protector policy from the last fiscal year. However, banks have not paid any attention to the policy despite considerable risk. It has been learnt that BFIs have not shown interest to purchase cyber security insurance policy as such policies are expensive as compared to other insurance policies.

Sources at Nepal Rastra Bank said that the central bank is currently studying this issue. After formulating necessary policies, the central bank is planning to issue the directive to make it mandatory for BFIs to purchase cyber security insurance policy within the current fiscal year.

At present, BFIs have been insuring their property through blanket insurance. However, this insurance policy doesn’t cover cyber security risk.

A committee formed to probe the ATM hacking of August 31 by some Chinese nationals in Kathmandu has also recommended the central bank to introduce guidelines to make it mandatory for BFIs to purchase cyber security insurance policy.

NRB Spokesperson confirmed that the central bank is currently studying the issue and will instrduce the directive soon.

A group of Chinese hackers had illegally withdrawn more than Rs 30 million from different ATMs in the capital as well as from India using cards issued by Nepali banks on August 31.

Nepal is likely to recover the amount confiscated from six Chinese nationals and operators of two money exchange centres arrested in connection with the case but the amount withdrawn from India is unlikely to be recovered.

Likewise, 12 Nepalis were also arrested about a month ago for withdrawing more than Rs 47 million using the username and password of staffers of Agriculture Development Bank. The group was reportedly operating under the instructions of an African named Peter, who allegedly resides in Mumbai. Police have recovered Rs 4 million in this case.

Following these incidents, the central bank has pressed for cyber security insurance.