In a major breakthrough on facilitation of cross-border online payments, Nepal Rastra Bank (NRB) has revised its policy permitting traders and Nepali workers in India to use digital platforms to transfer their money.
By amending the unified circular issued by the Foreign Exchange Management Department of the NRB on Friday, the central bank has enforced a provision allowing Nepali traders to receive payment made by their foreign partners via Quick Response (QR) Code. “The merchant payments issued in foreign countries can be acquired by Nepali commercial banks and national level development banks through QR code under the National Payment Switch system. However, the banks concerned have to undertake the related risks that could arise in the digital transactions,” reads the revised guideline issued by the NRB.
According to the NRB, importers of foreign goods and services can also make payments to their foreign partners by using similar platforms.
To facilitate Nepali citizens working in India to send their money back home, the NRB has permitted doing so by using the person-to-person transfer system. The central bank permitted these Nepali workers to send money in Nepali banks through electronic banking (e-banking), interbank payments, mobile banking, and QR codes via the National Payment Switch.
Likewise, the central bank has also permitted Indian nationals working in Nepal to send money through QR codes. With the provision in place, the Indian workers can now deposit money into personal accounts opened in Indian banks and financial institutions.
The central bank however has fixed the threshold limit on remitting money from Nepal to India. Through the digital payments, Indian workers can remit salaries of up to IRs 15,000 per day and INR 100,000 per month.
The cross-border payment system is expected to be a boon for Nepali entrepreneurs and also the Indian visitors as they will be spared the hassle of carrying bundles of cash since Indian banknotes of denominations of above INR 100 are banned in Nepal. It will also respite Nepali workers in India who had been facing difficulties in sending their money in their homeland.
Earlier, the bilateral agreement for the digital payment system was signed during the India visit of Prime Minister Puspa Kamal Dahal last June. In the agreement which was formalized last month, the two sides consented on establishing a joint mechanism to look over the transaction to be carried out via the electronic payment system.
