August 22: Until a few years ago, normal transactions used to be done either with cheques or cash. With the gradual development in the field of information and technology, banks and financial institutions have been promoting electronic transactions.

Electronic transaction, which used to be an alternative system before the onset of Covid-19 pandemic, has now become an essential service to the general public. Nepal Rastra Bank has systematically promoted electronic payments and transactions while systems like Mobile Wallet, Connect IPS, Real Gross Time Settlement (RGTS) have been brought into operation.

It has also added ease and reliability to the business for the general public. With the increase in e-transactions, the responsibility of the regulatory body regarding security has been added.

As per the data of the Fiscal Year 2077/78 made public by Nepal Rastra Bank, both the number and volume of electronic transactions have increased. According to the central bank, there has been a significant increase in transactions through RGTS, Connect IPS and mobile banking.

According to the central bank, electronic transactions worth Rs 1.63 trillion took place in May 2020 while there has been electronic transaction of Rs 2.11 trillion in May 2021. It has a large share of RTGS, Connect IPS and mobile banking.

Transactions based on Quick Response (QR) code has also increased. While there was 195, 016 QR transactions in June 2020, there were 502,666 such transactions in May 2021.

In May 2020, transaction through mobile banking was done 5.81 million times which increased to more than 11 million in mid-June 2021.  

The general public has also given priority to electronic transactions as they were not able to do transaction physically by visiting banks and financial institutions during the Covid-19 pandemic. The attraction of people toward electronic transaction has increased as it has become easier and cost effective.

According to the NRB, the transaction through Connect IPS is more than Rs 100 billion.

Transactions of Rs 51.30 billion through Connect in mid-June 2020 has increased to Rs 157 billion by mid-June 2021. While there were 1.46 million transactions in the previous year, it has increased to 2.16 million this year.

According to Nileshman Pradhan, chief executive officer of Nepal Clearing House Limited (NCHL), the increase in electronic transactions is also due to the growing awareness among customers about technology and coronavirus. He said that the cashless transactions have increased due to the meaningful efforts of the government, Nepal Rastra Bank and other concerned governmental and non-governmental bodies. The volume of transactions through Connect IPS has increased by 660 percent.

Transactions through IPS have also increased by 85 percent. Pradhan says that cash transactions can be reduced to a minimum point if electronic transactions are made easy and acceptable in all sectors.

The central bank had launched a campaign to promote the use of QR codes in major vegetable markets, departmental stores and other public places in the country.

Manoj Gyawali, Deputy General Manager of Nabil Bank, says that the increase in electronic transactions is also due to the easy policy arrangements by Nepal Rastra Bank and awareness among the citizens.

Giving information that banks and financial institutions have already made arrangements to provide loans through phone or digital system, Gyawali expressed his belief that more than 4.5 million customers will be connected through electronic transactions in a short time.

The central bank plans to promote cashless transactions. Governor Maha Prasad Adhikari has termed this campaign as a major campaign. The monetary policy of the current fiscal year also includes a plan to make the electronic payment system more systematic and effective.

The central bank, which is involved in the promotion of cashless transactions, is preparing to set up a national payment switch. The monetary policy aims to celebrate the FY 2079/80 as the year of electronic payment transaction promotion. For that, the goal is to focus on the development of necessary infrastructure and raising awareness in the current fiscal year.

According to Governor Adhikari, Nepal's own payment card will be used for electronic transaction by maintaining interconnection between electronic payment devices. Special refinancing will be provided to the payment service providers and payment system operators and communication service providers investing in the development and promotion of the overall ecosystem of electronic payment system.

The amount of electronic payment has also increased from the government's revenue to the purchase of other daily necessities.