India-Nepal enhance financial cooperation; digital payment to be inaugurated soon

Nepal’s Ambassador to India, Shankar Sharma on Saturday appreciated the new guidelines of the Reserve Bank of India, which allow multiple financial services between the people of India and Nepal.

He said that now Nepal citizens can send Rs 2 lakh per transaction to Nepal and walk-in customers can remit Rs 50,000 per transaction.

The Nepal envoy also said that Unified Payment Interface-Nepal Clearing House Ltd, which is to be inaugurated soon, will further eliminate any inconvenience of carrying cash.

“RBI’s updated regulation allows Nepali account holders to send Rs 2 lakhs per transaction (without any limit) to. Walk-in customers can remit Rs. 50,000 per transaction (12 per yr). The soon-to-be-inaugurated UPI/NCHL mechanism will eliminate inconvenience of carrying cash,” Sharma posted on X on Saturday.

Last December, Indian Ambassador to Nepal, Naveen Srivastava, announced that the digital payment gateway between India and Nepal is expected to start in the first phase at the end of February 2024.

In June 2023, the NPCI International Payments Limited (NIPL) and Nepal Clearing House Limited (NCHL) joined hands to facilitate cross-border digital payments between India and Nepal by integrating the Unified Payments Interface (UPI) of India and the National Payments Interface (NPI) of Nepal.

During Nepal PM Pushpa Kamal Dahal’s visit to India, an MoU was exchanged between NIPL and NCHL. As per the MoU, both bodies intend to establish cross-border connectivity for financial transactions between the two countries to ease fund transfers and merchant payments by users.

The initial engagement was for inward and outward transfers between the banks in India and Nepal, which will be achieved by integration between the UPI of India and the NPI of Nepal to enable existing instruments for cross-border transactions, which will be subsequently extended for other merchant payments.

Designated by the Nepal government, the Nepal Clearing House Limited (NCHL) has a 10 per cent investment from Nepal Rastra Bank — the Central Bank of Nepal and 90 per cent from other different commercial banks.