Central bank allows cross-border payments via 'Retail Payment Switch'

KATHMANDU, JUNE 30: The Nepal Rastra Bank has facilitated international payment transactions between Nepal and India through the 'Retail Payment Switch'. By recently revising the Integrated Circular 2080, the central bank now allows online remittances between the two countries, and tourists in Nepal can pay for goods and services using QR codes.

Previously, in March, the central bank had mandated the use of the National Payment Switch for international payments. However, the recent amendment permits the use of the Retail Payment Switch until the National Payment Switch becomes fully operational.

The National Payment Switch supports both card and cardless transactions, whereas the Retail Payment Switch currently only allows for cardless transactions.

Although the government launched the National Payment Switch 2.5 years back, it has yet to become fully operational. Presently, it is only the wallet companies using the same for business transactions.

As per the NRB's instructions, Indian citizens working in Nepal can deposit money into accounts in Indian banks and financial institutions via e-banking, interbank payment, mobile banking, and QR codes. The transaction limits are set at Rs 15,000 per day and Rs 100,000 per month. Moreover, remittances can be sent from India using QR codes to accounts in Nepali banks and financial institutions.

During Prime Minister Pushpa Kamal Dahal's visit to India in May last year, an agreement was reached between Nepal and India to initiate the cross-border payment service. Nepal Clearing House Limited (NCHL) and NIPL, the international branch of the National Payments Corporation of India (NPCI), formalized the agreement.