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KATHMANDU: Nepal Rastra Bank (NRB) has introduced flexibility in using Quick Response (QR) codes for cross-border financial transactions with India, marking a significant amendment to its unified circular issued by the Foreign Exchange Management Department. Previously, such transactions were restricted to using a national payment switch, but now QR codes and related payment tools can be employed through the Retail Payment Switch as well.
In its statement, NRB emphasized that payments for goods and services, including sales in foreign currencies, can now be received electronically using QR codes. This directive allows Payment Service Providers (PSPs) to utilize the Retail Payment Switch until the national payment switch becomes fully operational.
PSPs are now authorized to conduct acquiring and issuing transactions under Merchant Payments (P2M). Before entering into agreements with foreign companies, PSPs must obtain approval from NRB's Payment Systems Department and submit various documents including the main agreement, company profile, interface configuration, and details on cybersecurity measures and anti-money laundering protocols.
In case of any transaction discrepancies, PSPs are required to settle such issues within 30 days (T+30). Both the issuing and acquiring companies are subject to supervision by NRB during the settlement process.
Companies not licensed to transact in foreign currencies can now receive international payments via PSPs' accounts and wallets, with settlements limited to transactions in Nepali currency through designated Nepali banks.
Additionally, clients of Nepali commercial banks and national-level development banks can utilize QR codes for transactions involving Indian currency, specifically for payments to be made in India and Bhutan. This initiative is expected to benefit Nepali entrepreneurs and Indian visitors alike, following a bilateral agreement for a digital payment system signed during Prime Minister Pushpa Kamal Dahal's visit to India in June 2023.
