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    AI in Nepal: the rules, the readiness and where to start

    Last checked: 26 October 2026

    What should a company in Nepal know before starting with AI?

    Nepal approved a National AI Policy in August 2025, but it is a policy, not a law, and we found no dedicated AI law as of 26 October 2026. Personal data is covered by the Privacy Act, 2075 (2018), which has consent rules and criminal penalties but no data protection regulator. Banks should also watch Nepal Rastra Bank's draft AI guidelines.

    At a glance

    Nepal at a glance

    Key facts about Nepal
    Data protection lawPrivacy Act, 2075 (2018), in force. No separate data protection law
    RegulatorNo dedicated data protection authority found. Complaints go to the District Court
    AI policyNational AI Policy, 2025 (approved August 2025). No dedicated AI law as of 26 October 2026
    Time zoneUTC+5:45 (15 minutes ahead of India)
    CurrencyNPR
    Business languageNepali, English

    Why now

    Why Nepal is worth watching

    Each point links to the document it comes from.

    • The National AI Policy, 2025 aims to raise the IT sector's share of GDP by one percentage point through AI, train at least 5,000 AI professionals in five years, and set up AI Excellence Centres in all provinces.[2]

    • The policy names agriculture and health as priority areas for AI in public services, and plans an AI Regulation Council and a National AI Centre.[3]

    • Nepal received about 1.15 million foreign tourists in 2025, with India the largest source at 292,438.[7]

    • Remittances reached Rs 1,723.27 billion (US$12.64 billion) in fiscal year 2081/82, up 19.2 percent in rupees, according to Nepal Rastra Bank data as reported in the press.[8]

    • Nepal Rastra Bank has drafted AI guidelines for banks, finance companies and payment providers, so the financial sector is preparing for formal rules.[5]

    The rules

    The rules that matter for AI

    What each law or policy means when you build or buy an AI system.

    Privacy Act, 2075 (2018)

    In force2018Section 12 requires consent before collecting personal or family data, and limits use to the purpose the data was collected for. Section 26 bars using personal information held by a public body or body corporate without consent, with listed exceptions. Offences carry up to three years in prison or a fine up to Rs 30,000, or both, and a victim can ask the District Court for compensation. The text we read has no breach notification duty, no rule on transfers abroad and no rule on automated decisions.[1]

    National AI Policy, 2025

    Policy, not a law2025The policy calls for laws on data security and AI risk, and for an AI Regulation Council and a National AI Centre. It says the government shall make the legal arrangements needed to carry it out. We found no official notice that the Council or Centre has been formed, and no AI statute, as of 26 October 2026.[2]

    Information Technology and Cyber Security Bill, 2082

    Draft2025The House of Representatives passed this bill on 14 August 2025. It is meant to replace the Electronic Transactions Act, 2063 (2006). A law firm page checked in April 2026 says the old Act remains in force and the bill is not yet enacted, but we could not confirm the bill's stage in Parliament, so its status is unclear as of 26 October 2026.[4]

    Nepal Rastra Bank draft AI guidelines

    Draft2025The draft, circulated in December 2025, would cover banks, development banks, finance companies, microfinance institutions and payment system operators. It proposes an AI steering committee, Board approval of an AI framework, annual reports to the central bank, and outsourcing procedures for AI services bought from vendors. We could not confirm whether a final version has been issued.[5]

    Where AI fits first

    Where AI fits first

    Banking, payments and fintech

    Customer service in Nepali, document checks for loan files and fraud alerts.

    The Nepal Rastra Bank draft would require explainable, fair AI decisions and reports on AI use. It is still a draft as far as we could verify.[6]

    Tourism

    Multilingual guest messaging for hotels and trekking operators, and booking support.

    Arrivals were about 1.15 million in 2025, and Nepal's own Privacy Act requires consent before collecting guests' personal data.[7]

    Remittances

    Money transfer customer service, identity document checks and fraud monitoring for remittance firms and banks.

    Remittance volumes are large, so errors and data leaks have real cost. Financial firms fall under the central bank's draft AI guidelines.[8]

    Agriculture

    Crop advice and market price information for farmers, in Nepali.

    The AI policy lists agriculture as a priority for AI in public service delivery. Farmer data is personal data under the Privacy Act.[3]

    Your first steps

    Your first steps

    1. List the personal data you hold and confirm you have the person's consent for each use, as sections 12 and 26 of the Privacy Act expect.
    2. There is no data protection regulator to give guidance, so write your own internal rule on what data may go into an AI tool.
    3. Check where your AI vendor stores and processes data, since the Privacy Act text we read does not cover transfers abroad.
    4. If you are a bank or payment firm, read Nepal Rastra Bank's draft AI guidelines and ask your compliance officer whether a final version has been issued.
    5. Pick one low-risk first use case, such as internal document search or a Nepali-language FAQ assistant.
    6. Keep a person in charge of any decision about a customer or employee, and record what the AI suggested.
    7. Watch the IT and Cyber Security Bill and any AI law, because duties may change.

    How we work with you

    How we work with you

    We work remotely with clients worldwide, in the client's time zone. Nepal is UTC+5:45 and India is UTC+5:30, so Nepal is 15 minutes ahead. If Indian hours are 9:30 to 18:30 IST, that is 9:45 to 18:45 in Kathmandu, so the shared window is 9:45 to 18:30, about 8 hours 45 minutes.

    Questions

    Common questions about AI in Nepal

    Does Nepal have an AI law?

    No. Nepal approved a National AI Policy in August 2025, but we found no AI statute as of 26 October 2026. The policy says laws will be made.

    Is there a data protection law?

    There is the Privacy Act, 2075 (2018). It sets consent and purpose rules and criminal penalties. We found no separate data protection law and no dedicated regulator.

    Can a customer take action if their data is misused?

    Under the Privacy Act, a complaint goes to the District Court, within three months of the act, and the victim can ask for compensation.

    Do banks have AI rules?

    Nepal Rastra Bank circulated draft AI guidelines in December 2025. We could not confirm whether they are final, so check with the bank's compliance team or the central bank's notices.

    Are the cyber and e-transaction laws changing?

    Possibly. A new bill to replace the Electronic Transactions Act passed the House of Representatives in August 2025, but its current stage is unclear.

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    Read next

    Sources

    Sources

    Facts checked on 26 October 2026. Numbers in square brackets above match this list.
    1. [1] Law Commission of Nepal, English text hosted by the Asian Development Bank, 2018-09-18. The Privacy Act, 2075 (2018)(lpr.adb.org)
      Full title and what we used it for

      The Privacy Act, 2075 (2018). Primary source (unofficial English translation; the Nepali text governs). Used for sections 12, 26, 29, 30, 31 and for the absence of regulator, transfer and breach rules.

    2. [2] Government of Nepal, Ministry of Communication and Information Technology, 2025-08-11. National Artificial Intelligence (A.I.) Policy, 2025(giwmscdnone.gov.np)
      Full title and what we used it for

      National Artificial Intelligence (A.I.) Policy, 2025. Primary source. Used for goals, planned bodies, legal provisions, and the mention of the Electronic Transactions Act, 2006. The approval date comes from press reports (n3).

    3. [3] The Kathmandu Post, 2025-08-16. Nepal rolls out ambitious AI policy(kathmandupost.com)
      Full title and what we used it for

      Nepal rolls out ambitious AI policy. News report. Used for the Cabinet approval and for agriculture and health as priorities.

    4. [4] myRepublica, 2025-08-15. Bill on 'Information Technology and Cyber Security' endorsed(myrepublica.nagariknetwork.com)
      Full title and what we used it for

      Bill on 'Information Technology and Cyber Security' endorsed. News report. House of Representatives passed the bill. No later stage described. Lawalpine (law firm, https://lawalpine.com/blog/electronic-transaction-act-nepal, page dated April 2026) was also read for the claim that the old Act remains in force; it is secondary and has internal inconsistencies.

    5. [5] The Annapurna Express, 2025-12-12. NRB prepares guidelines to regulate use of AI in financial sector(theannapurnaexpress.com)
      Full title and what we used it for

      NRB prepares guidelines to regulate use of AI in financial sector. News report on the Nepal Rastra Bank draft AI guidelines. The bank's own page was not reachable, so the draft text was not read.

    6. [6] Kantipur (ekantipur.com), 2025-12-11. Proposal to form an 'AI Steering Committee' in financial institutions(ekantipur.com)
      Full title and what we used it for

      Proposal to form an 'AI Steering Committee' in financial institutions. News report, machine-translated page. Confirms the draft and the steering committee proposal.

    7. [7] Kantipur (ekantipur.com), 2026-01-01. Nepal welcomed 1.15 million tourists in 2025(ekantipur.com)
      Full title and what we used it for

      Nepal welcomed 1.15 million tourists in 2025. News report. Used for 2025 arrivals and India as largest source market.

    8. [8] Nepsetrading, 2025-08-24. Remittance inflows surge by 19.2%, labor migration approvals on the rise(nepsetrading.com)
      Full title and what we used it for

      Remittance inflows surge by 19.2%, labor migration approvals on the rise. Secondary news site citing Nepal Rastra Bank data for fiscal year 2081/82. The bank's original release was not read.

    This is general information, not legal advice. Nepal's laws are changing, and the status of the IT and Cyber Security Bill and the central bank's AI guidelines was unclear on 26 October 2026. The English Privacy Act text is an unofficial translation. Check with a qualified Nepali lawyer before you decide. Facts were checked on 26 October 2026.

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