The Nepal Weekly 
March 19, 2024
After India, Nepal’s central bank has opened the digital payment system for third countries, pending the completion of necessary arrangements by Nepal’s commercial banks for its formal enforcement. The policy introduced on Friday, for the first time, will allow foreign citizens in Nepal to pay through a quick response (QR) code for purchases in Nepal. Bankers say they will implement the system soon.
The central bank – Nepal Rastra Bank – by amending the inter-country payment system through QR code guidelines, has introduced a provision to allow 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.
The funds will be received by the sellers’ bank accounts in a convertible currency, said Dilli Ram Pokhrel, deputy information officer at the Nepal Rastra Bank.
Under the reciprocal basis, Nepalis travelling to third countries can also make foreign currency payments using the QR ode through the national payment switch with the bank account associated with Nepali commercial banks, according to the amended guidelines.
Currently, a Nepali can get an exchange facility for up to $2,500 while travelling abroad. This means the limitation for each Nepali travelling abroad has been set at $2,500. “This provision, however, is not applicable for Nepalis in India,” said Pokhrel.
The central bank said that it has been studying the permissible spending limit for Nepalis in India.
From March 1, Indians are allowed to make payments for purchases through their mobile phones, marking a milestone in cross-border digital payment between Nepal and India.
Upendra Prasad Poudel, chairman of Nabil Bank, said since foreigners are allowed to make payments in Nepal using their Visa cards or Mastercards, the QR code system is a great leap forward to promote the digital economy. Poudel, who is also president of the Confederation of Banks and Financial Institutions Nepal, said the new system, once enforced, will connect Nepal to the international payment system.
Nepal and India have a total trade amounting to Rs1.13 trillion, out of the total annual trade amounting to Rs1.76 trillion.
The central bank has also made it easy to send remittances between Nepal and India.
According to the amended guidelines, Indian workers in Nepal, who have accounts in Nepali banks, can send money through e-banking, interbank payment, mobile bank and QR code to Indian banks and financial institutions through the national payment switch.
The central bank has set a limit of INR15,000 per day and INR100,000 per month for person-to-person transfers.
Similarly, in the same way, Nepali citizens who have accounts in Indian banks and financial institutions can send remittances to Nepal using e-banking, interbank payment, mobile banking and QR codes.
