The government has reduced the maximum cash payment limit for goods and services to Rs 500,000 per transaction in an effort to promote formal banking, expand digital payments, and curb financial crimes and revenue leakage.
A recent Cabinet meeting decided that any transaction above this threshold must be conducted through banks or financial institutions starting mid-January, according to Government Spokesperson and Communications Minister Jagdish Kharel.
Previously, transactions exceeding Rs 1 million required non-cash payment as per a 2017 notice. The new rule will take effect after being published in the Nepal Gazette.
Nepal Rastra Bank (NRB) stated that payments beyond the limit can be made via checks, mobile or internet banking, RTGS, IPS, and ConnectIPS. The limit does not apply to cash deposits in banks, loan repayments, or transactions between financial institutions.
Individuals may retain large amounts of cash at home for specific purposes if they disclose the source. Events such as weddings and social functions are also exempted with proper disclosure.
The measure aligns with the Asset Laundering Prevention Act and is expected to reduce tax evasion, illicit financial flows, and government expenses related to handling banknotes.
