Nepal Rastra Bank (NRB) has taken initiatives to facilitate a digital payment system to ease the cross-border financial transaction amid growing complaints of traders facing problems.
NRB Governor Maha Prasad Adhikari said the upcoming monetary policy will also bring in measures to promote digital platforms in cross-border payments. “The central bank has already permitted the payment service operators and payment service provider companies in financial transactions to third countries. They are in the process of integrating with their partner companies abroad,” said Adhikari at a program on Tuesday.
Since March, the central bank has permitted Nepali workers in India 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 NRB has also permitted remitting money from Nepal to India within a threshold of up to INR 15,000 per day and INR 100,000 per month.
Later on, the NRB extended the facility of the digital payment system for third countries, allowing foreigners to make payments while purchasing goods and services from Nepali traders in foreign currencies through the national payment switch, using the QR codes issued in their respective countries. Under the reciprocal basis, Nepalis traveling to third countries can also make foreign currency payments using the QR code through the national payment switch with the bank account associated with Nepali commercial banks. The NRB has asked the banks to analyze, manage and mitigate the risk by themselves.
The NRB and Reserve Bank of India have already signed an agreement to integrate Unified Payments Interface, India and the National Payment’s interface, aiming to facilitate cross-border remittances. According to NRB Governor Adhikari, they are preparing to sign similar agreements with Alipay of China and LankaPay of Sri Lanka soon.
Adhikari further added that the central bank has considered the revival of the overall economy through the monetary policy for FY 2024/25. “It has come to the notice of the central bank that mostly the external sectors are doing well at present, while a few internal sectors including construction, real sector and small and medium enterprises have been struggling at this moment,” said Adhikari, hinting that the central bank could bring measures to address these problems.
At a time when many traders have been blaming the ongoing economic slowdown for the NRB’s stern measures on working capital loans, the NRB Governor asserted that the central bank has largely solved the issue through an amendment to the working capital loan guidelines. “Targeting to facilitate small businesses, the central bank has permitted them to take working capital loans of up to Rs 40 million,” he said.
