NRB to establish a nationwide payment switch

Nepal Rastra Bank (NRB) will establish a nationwide payment switch to promote cashless transactions. In its monetary policy announced on Friday, NRB aims to make FY 2022/23 a year of promoting electronic payments and transactions, for which it will emphasize the need for infrastructure development and awareness in the current FY 2021/22.

The policy emphasizes the use of the country’s own payment cards in interconnected electronic payment gateways, as well as clearing and registration gateways for digital payments.

Dedicated over-loans will be provided to payment service providers or payment system operators and communication service providers to develop and promote the entire ecosystem of electronic payment systems.

The Central Bank will take necessary measures to facilitate income payments and all types of payments through banking and digital systems. Arrangements will be made for beneficiaries eligible for social security benefits to receive them digitally from banks engaged in government business.

For the current COVID-19, the deadline for the implementation of minimum transactions and customers by payment service providers and payment system operators has been extended until mid-July 2022. Similarly, digital credit guidelines will be developed and implemented to help banks and financial institutions provide services such as loan applications and approvals digitally.

The aim of the policy is to conduct a feasibility study on digital currencies in the country when many foreign countries have already adopted them or some others are already operating. Measures will be taken to ensure that anyone can apply for Citizen’s Savings Bonds and Overseas Employment Bonds digitally, and necessary studies will be conducted on the use of cloud infrastructure.

There is a policy to conduct the necessary research on the subject for payment service providers to provide small loans of a certain amount in line with the concept of digital banking. This is done to promote micro, small and home-based industries and start-ups.

According to Governor Maha Prasad Adhikari, payment service providers and payment system operators, in addition to banks and financial institutions, should report details of transactions exceeding the prescribed limits and suspicious transactions to the Financial Information Unit.