Indian Ambassador Naveen Srivastava announced on Friday that the digital payment gateway between India and Nepal is expected to begin operations in its maiden phase by late February 2024. In making his remark, he brought up the deal that Prime Minister Pushpa Kamal Dahal and NCHL had inked earlier this year while in India.
Ambassador Srivastava stressed the importance of fintech as a revolutionary global trend, particularly in India. He emphasized how India, via the Unified Payment Interface (UPI), is a leader in digital payments. This fintech development offers India and Nepal a chance to work together more frequently.
Srivastava went on to talk about how Ambassador Manjeev Singh Puri was the driving force behind the introduction of the Ru-pay card in Nepal last year. During PM Prachanda's visit to India earlier this year, he emphasized more advancements in digital cross-border payments made possible by the backing of Governor Maha Prasad Adhikari and the Finance Minister. Following that visit, Nepal Clearing House Limited and NPCI (National Payments Corporation of India) signed an agreement.
The Indian ambassador expressed hope, revealing that the NPCI and NCHL payment system will be live by late February 2024, allowing for instantaneous cross-border people-to-people transactions. The India-Nepal Center of the PHD Chamber of Commerce and Industry (PHDCCI) hosted the Nepal BFSI (Banking, Financial Service, and Insurance Summit), during which Ambassador Srivastava gave these remarks during the inaugural session.
By connecting India's Unified Payments Interface (UPI) with Nepal's National Payments Interface (NPI), NPCI International Payments Limited (NIPL) and Nepal Clearing House Limited (NCHL) teamed in June to facilitate cross-border digital payments between India and Nepal.
NIPL and NCHL exchanged an MoU during PM Pushpa Kamal Dahal's visit to New Delhi. As per the Memorandum of Understanding, the two entities want to establish cross-border connectivity for financial activities, hence expediting fund transfers and user payments to merchants.
For cross-border transactions including inbound and outward transfers between banks in both countries, the first partnership will concentrate on integrating the UPI of India and the NPI of Nepal. Later on, other merchant payments will be included in the project.
Nepal Clearing House Limited (NCHL) is approved by the Nepalese government, with 10% invested by Nepal Rastra Bank, the country's central bank, and 90% from other commercial banks.
Governor Maha Prasad Adhikari of Nepal Rastra Bank (NRB) emphasized India and Nepal's collaborative efforts to improve payment networks between the two countries. He was excited about advancing digital cross-border payment technologies.
Since Nepal has banned Indian currency values beyond 100 (INR), the first phase of the India-Nepal payment gateway would offer much-needed respite for Indian visitors visiting Nepal. Along with making payments for larger-value digital items easier, this new system will promote real-time, interoperable merchant and person-to-person (P2P) and P2M payments.