KATHMANDU: Nepal Rastra Bank has made arrangement for international payment (cross-border payment) transactions between Nepal and India through the 'Retail Payment Switch'. By revising Integrated Circular 2080 on Thursday, the central bank has arranged that remittances can be sent from Nepal to India and vice versa online, and tourists can pay for goods and services in Nepal through QR code.

Last March, the central bank had issued a directive making the use of the National Payment Switch mandatory for international payments. Amending the directive, the central bank has now allowed the Retail Payment Switch to be used until the National Payment Switch is fully operational.

The National Payment Switch allows both card and cardless transactions while only cardless transactions can be conducted through the Retail Payment Switch.

Although the government's National Payment Switch was launched in November 2078, it has not been fully operational. Currently, only wallet companies are using it for business transactions.

According to the NRB’s instructions, Indian citizens working in Nepal can deposit money in accounts opened in Indian banks and financial institutions through e-banking, interbank payment, mobile banking, and QR codes. A limit of Rs 15,000 per day and Rs 100,000 per month has been set for such transactions. Additionally, there is a provision that remittances can be sent from India through QR codes to accounts opened in Nepali banks and financial institutions.

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

In August, NIPL also entered into an agreement with Nepal's private sector payment service provider, PhonePay, for the operation of the cross-border payment service.

NIPL also signed agreements with other private companies at the Global Fintech Fest-2023, in the presence of Nepal Rastra Bank Governor Maha Prasad Adhikari.

In February, an agreement was reached between the United Payment Interface (UPI), which operates as a payment switch in India, and the National Payment Interface (NPI), which operates as a payment switch in Nepal, to establish a bilateral regulatory mechanism. However, it has not yet started. The central bank has approved payment service providers NCHL and PhonePay to operate the cross-border payment service.