Nepal's inclusion in the Financial Action Task Force (FATF) grey list has triggered a political controversy, with the opposition party CPN-Maoist Centre calling for Prime Minister KP Sharma Oli's resignation. This marks the second time Nepal has been placed on the grey list, which includes countries that have weaknesses in their systems to prevent money laundering and terrorism financing. 

Nepal was also on the FATF grey list from 2008 to 2014. Madhav Sapkota, an MP from the opposition Maoist Centre, called for Oli's resignation during a House of Representatives meeting on Sunday due to the body's failure to prevent Nepal from being placed on the FATF grey list. "The organisation that monitors money laundering and terror financing, the FATF officially has included Nepal in its grey list. Inconsistency of the government, failure to bring improvement in the financial sector and negligence towards good governance have finally reached to the point of shame. I deeply regret this and condemn it. This development signals that the government does not prioritise good governance and has utterly failed. The government must step down for the sake of moral responsibility," Sapkota remarked. He also said that the public no longer has faith in the administration. In order to protect the nation's honour, prestige, and dignity, he urged the House of Representatives to act decisively. 

During its plenary conference in Paris from February 17–21, the FATF made its decision, pointing to Nepal's failure to fully implement the structural, legal and policy changes required to prevent money laundering and the funding of terrorism. Nepal will be subject to additional international transaction barriers and sanctions if it doesn't rectify these shortcomings and get off the grey list within the allotted two years. Nepali Congress lawmaker Arjun Narshingh KC suggested demonetising NPR 500 and 1000 banknotes to tackle the issue. He stressed the importance of discussing this in Parliament and investigating corruption cases to protect Nepal's international reputation. "Nepal again has been enlisted in the grey list of the Financial Action Task Force (FATF). The Corruption Index made public lately by Transparency International, Nepal has moved up further; this shows that the debt of Nepal is rising along with the nation being plagued by corruption," KC stated.

"This would result in the flow of international assistance and financial management will be seriously hampered, also a parliamentary discussion over the matter is the need of time. In order to avoid this kind of trend, demonetisation of 500 and 1000 rupees notes and the investigation should be carried out on the cases of corruption that have rocked the nation over time in order to save the international image," KC added. Last week, Nepal's Finance Minister, Bishnu Paudel, promised to strengthen efforts against money laundering and terrorist financing by introducing several reforms. He also assured that action would be taken against illegal payment service providers (MBTS) and hundi operators while ensuring that financial inclusion is not affected.