The federal bank of Nepal, Nepal Rastra Bank has announced a new limit for domestic remittance. Releasing a new notice, the bank set the domestic remittance limit at Rs.25,000 inside the country.
The central bank has declared the new threshold for domestic remittance for licensed remit companies, their sub-agents, and sub representatives. The new regulation now allows a maximum of Rs.25,000 of domestic remit transactions per person per day.
The bank displaced the previous domestic remittance limit of Rs.1,00,000 lowering it to Rs.25,000.
But this change does not apply to transactions relating to banking services. It also must be understood that this revised remit transaction concerns domestic services only.
For remittance entering Nepal from abroad, the family and friends in Nepal can receive the amount as previously allowed. Meaning there is no change in the terms for foreign remittance transaction limit.
Encouraging banking and e-wallet transfers!
At the moment, Nepali banks and financial institutions are facing a liquidity crisis. There is simply not enough cash circulating in the market. And to address this situation, banks have increased their internet rates on fixed deposits to lure in more savings. In line with this, lowering the domestic remittance limit will compel people to transact their money through banks or digital wallets. The remittance system is less regulated while banks are directly accountable to the central bank.
Another advantage with banks and inter-wallets transfer is security. The transactions are world-class security compliant and each record is stored online for reference. Likewise, NRB is pushing for higher financial literacy among the public and expects a higher reach of banking services. For this, banks and digital wallets become more prominent vehicles for the central bank than the remit system.
All these reasons added remit service is a less attractive transaction system for the NRB and the overall financial situation in the country right now than the remit system. This is why lowering the scale for domestic remittance is an implied intent by the central bank to encourage people to resort to banking and wallet transfers.
The Scale for Domestic Remittance comes following a policy commitment from NRB. The bank had announced its plans to narrow the scale in its half-yearly analysis of monetary policy.