Nepalese can Finally Make International Payments: NRB paves a road for International Payment System
If you had wanted to buy a product from Amazon, subscribe to Netflix and Prime, pay for online ads, buy Udemy or Skillshare Courses, you can now finally do it all on your own. Nepal Rastra Bank has recently accepted a proposal for an international payment system. After being dependent on friends and family overseas or using other services with a hassle, Nepali people can now finally pay for international services independently.
Finally, on the 28th of December, 2020, NRB had published a Consultation Document on its official website about the proposal for the International Payment System in Nepal.
The International Payment from Nepal was a process full of hassle in Nepal. NRB has acknowledged Nepalese using Paypal and Payoneer cards of their relatives residing abroad. And for the ones without any relatives were buying gift cards with a hefty price tag. Nepal Rastra Bank has classified such activities as Digital Hundi. With Digital Hundi, the government can’t trace the Nepalese wealth leaving the country, impacting the country’s economy and hides the revenue/tax.
With the International Payment System, customers can now pay for Netflix and Amazon prime accounts, buy goods on Amazon, and pay for the online ads. But there is obviously a downside; NRB limits you to spend USD 500 annually, which means you have to be very smart about spending your USD 500 and not buy luxury items.
The proposal for the International Payment System has been drafted and submitted to Nepal Rastra Bank for Consultation. According to the draft, users can make yearly transactions of USD 500 max on unsanctioned foreign goods/services. The transactions will be based on the prepaid cards issued by the commercial banks. The points of the proposal are listed below:
To apply for a Prepaid card, the individual, institution, firm, or organization should first fill up their KYC details and submit PAN details.
Commercial Banks can deposit upto USD 500 or an equivalent amount in any other currency based on the exchange rate of the requested date on request of the customers. The government shall deduct taxes in advance from the deposited amount.
Through a single transaction or multiple transactions, customers can only have upto USD 500 in a year or equivalent in any other currency.
Users can then purchase international goods or services deemed legal by the Government at the comfort of their home.
If the user has made international payments below USD 500 in the previous year, the bank can deposit again without exceeding the yearly limit of USD 500.
User earning twice the deposited amount from foreign sources submits the proof to the bank then s/he can deposit additional amount in the card.
One user can only use the service from a single bank. If found depositing international currency from multiple banks or in another person’s name/card, the person will be subjected to the action based on the existing Foreign Currency Act.
The international payment system will be according to the Money Laundering Prevention Act, 2064. So, the user will have to follow all the regulations directed by the act.
The specific banks must submit the card, transaction details of their users every month; with one week’s buffer period.