The Nepal Rastra Bank (NRB) has warned gold traders’ associations not to charge fees for recommending entrepreneurs to purchase gold from commercial banks—a practice that violates existing regulations.

The warning comes after complaints that some authorized gold trading organizations were demanding fees from traders in exchange for recommendation letters. Under the Procedures for Gold Import, Sale, and Distribution, 2011, commercial banks are allowed to sell gold to traders only if they are recommended by one of the designated associations. The leadership of these organizations has admitted to taking fees for this service.

In a notice published on Tuesday, NRB cited Section 14 of the procedure, which explicitly prohibits gold business associations and federations from charging any fees or commissions for making recommendations. “Associations, federations, and entrepreneurs must fully comply with these provisions,” the central bank stated.

In Nepal, commercial banks are the sole entities authorized to import gold, and traders are required to go through them for purchases. A recommendation from a recognized gold trade association is a prerequisite. According to traders, five associations currently issue such letters. These include the Federation of Nepal Gold and Silver Dealers Association (Fenegosida), the Federation of Nepal Gold Silver Gem and Jewellery Associations (FNGSGJA), the Nepal Gold Silver Gem and Jewellery Associations Kathmandu, the Federation of Handicraft Associations of Nepal (FHAN), and Handicraft Entrepreneurs Association (Kala Byawasayi Sangh).

Narendra Kumar Gupta, owner of Riddhisiddhi Jewelers, told New Business Age that he was previously charged Rs 6,000 per tola and had filed a legal case, arguing that he should be allowed to purchase gold without requiring a recommendation. The Supreme Court later ruled in his favor.

Another trader said that the organisations have been demanding recommendation fees of Rs 2,000 to Rs 3,000 per kilogram. Meanwhile, Fenegosida President Arjun Rasaily claimed that the organization does not charge a “recommendation fee” but instead accepts voluntary contributions to support the federation.

Commercial banks currently import up to 20 kilograms of gold daily. However, rising gold prices have dampened market activity, and traders say the added burden of these unofficial fees is worsening their situation.