Governor of Nepal Rastra Bank Maha Prasad Adhikari presented the Monetary Policy of Nepal 2077/78 on July 17 (Shrawan 2). Even though the situation is adverse because of COVID-19 crisis, Nepal Rastra Bank is trying to be optimistic in this year’s monetary policy. NRB says it is focusing on economic stability and achieving the economic growth of 7 percent in this fiscal year.
Digital banking, fintech, and digital payments have received a special mention in this year’s monetary policy document. Unveiling the monetary policy, Governor Adhikari said that the adoption and growth of mobile banking has made banking transactions smooth even in this lockdown period. He further mentioned that COVID-19 is an opportunity to promote fintech and digital transactions in Nepal.
The monetary policy also mentions that there has been rapid expansion in access to finance in Nepal. As per the document, a total of 9716 branches of banks and financial institutions have been established across the nation.
In this article, we present you major highlights from the Monetary Policy of Nepal 2077/78 and what it says about fintech and digital payment in Nepal.
1. Minimize cash transactions and encourage digital transactions
The monetary policy this year has made special mention of the digital payments system. All kinds of financial transactions are encouraged to be made via digital methods, and cash transactions are to be minimized. Digital Nepal Framework also stresses on digital transactions. Furthermore, NRB aims to develop a safe and strong electronic payment system.
2. National Payment Switch to be established
As per the monetary policy document, a National Payment Switch is to be established and records are to be kept of all kinds of digital transactions in Nepal.
3. Issuance of LoI to new fintech companies halted
Through the monetary policy, Nepal Rastra Bank has announced the halt of issuance of Letter of Intent (LoI) to new fintech companies (PSPs and PSOs).
Additionally, the central bank has introduced a provision which mandates the licensed PSPs to reach business milestones. NRB can cancel the licenses of PSPs if they are not able to reach a total customer base of three lakhs and process average monthly transactions (count) of at least six lakhs by the end of Ashad 2078.
4. Guidelines to be issued to systematize Quick Response (QR) Payments
NRB is preparing to issue detailed guidelines to systematize QR payments in Nepal.
5. Payment System Development Indicator (PSDI) to be published
The central bank says a Payment System Development Indicator (PSDI) will be published soon. It will help to understand the actual size of the market in Nepal and the growth trend.
6. Facility to receive foreign currency in bank account after exporting information technology services
With the mission of encouraging people to receive payments for export of IT related services through formal channels, arrangements are to be made to receive the remittance amount directly in one’s bank account or card.
Do you want to read the full document of Monetary Policy of Nepal 2077/78? Get it from Nepal Rastra Bank’s website here.