April 18, 2024, Thursday
Nepal 1:37:26 pm

Nepal – India makes preparations for expediting digital payment system

The Nepal Weekly
February 20, 2024

Nepal and India have stepped up measures to develop a separate mechanism for an electronic payment system between the two countries. The matter was agreed upon at the government level.

National Payments Interface, Nepal and Unified Payment Interface, India on Thursday inked an agreement in this effect, according to officials at the Nepal Rastra Bank, the central bank of Nepal. In the bilateral agreement, the two sides consented to establish a joint mechanism to look over the transaction to be carried out via the electronic payment system. NRB Governor Maha Prasad Adhikari and Reserve Bank of India (RBI) Governor Shaktikanta Das were present at the signing ceremony, which took place in Mumbai, India.

The initiative will facilitate cross-border transactions between Nepal and India by using electronic payment gateways. This will prove to be a milestone in digital payment of Nepal with India, according to NRB.

Once the digital payment commences, the system will allow people-to-people funds transfer through mobile banking. According to the Nepal Clearing House, Nepali users can make a bank transfer to India with a unified payment interface (UPI) ID through mobile banking.

Likewise, Indian users can make bank transfers to Nepal through a unique identifier—which can be a mobile number.

The cross-border payment system is expected to be a boon also for Indian visitors as they will be spared the hassle of carrying bundles of cash since Indian banknotes of denominations of above INR 100 are restricted in Nepal.

Earlier in June 2023, discussion was held on India- Nepal cross border payments between Prime Minister Narendra Modi and Nepalese Prime Minister Pushpakamal Dahal “Prachanda”.