In a major step towards financial connectivity between two countries through cross-border digital payment, NCHL CEO Neelesh Man Singh Pradhan and National Payment Corporation India (NPCI) CEO Ritesh Shukla signed an MoU on June 1.
According to Pradhan, the technical work related to establishing the mechanism has been started. "First, we will integrate our structure with India's Unified Payments Interface (UPI)," said Pradhan. "After completing the integration process, we will roll out the services gradually." UPI is an instant digital payment system developed by NPCI. According to him, both sides are working out the details regarding instruments that can be used for digital payment, the methods of payments, and the types of transactions. Initially, the fund transfer service will be made available to ordinary consumers of both countries followed by merchant payments. "The technical discussion has begun with NPCI. After a few meetings, there will be clarity on the timeline to launch the services," said Pradhan. In the first phase, a trial run will be carried out by sending the amount from the account of Nepali Bank to the account of Indian Bank and vice versa through mobile banking. After that, payments through wallet, and QR will be implemented. NCHL is the authorized agency in Nepal by the central bank to establish and operate a national payment switch and a national payment card. The central bank, on the other hand, has also started preparations for policy arrangements on issues such as setting limits on transactions as well as service charges for cross-border payments. The implementation of cross-border digital payment services is expected to provide much relief to business people, students, pilgrims, and travelers from both Nepal and India. Once the mechanism comes into operation, citizens of these South Asian neighboring nations do not have to carry large amounts of cash while they visit between the two countries.
