Enhancement of Indo-Nepal remittance facility scheme are expected to boost trade payments
Reserve Bank on Friday hiked the ceiling on remittances per transaction from India to Nepal to Rs 2 lakh from Rs 50,000, a move that will help facilitate retirement and pension-related payments to ex-servicemen settled in the neighbouring country. Besides, the central bank has removed the cap of 12 remittances in a year per remitter.
“As hitherto, banks shall accept remittances by way of cash from walk-in customers or non-customers. The ceiling of Rs 50,000 per remittance with a maximum of 12 remittances in a year shall, however, continue to apply for such remittances,” Reserve Bank of India (RBI) said in a circular.
While increasing the ceiling, RBI has also advised banks to put in place suitable velocity checks and other risk mitigation procedures. “The enhancements are also expected to facilitate payments relating to retirement, pension, etc., to our ex-servicemen who have settled/ relocated in Nepal,” it said.
The circular is addressed to Chairman/ Managing Director/ Chief Executive Officer of all banks participating in NEFT (National Electronic Funds Transfer). The Indo-Nepal Remittance Facility Scheme was launched by RBI in May 2008 as an option for cross-border remittances from India to Nepal, with special focus on requirements of migrant workers of Nepali origin working in India.
The scheme leverages NEFT ecosystem available in the country for origination of such remittances and entails a ceiling of Rs 50,000 per remittance with a maximum of 12 remittances in a year.
The beneficiary receives funds in Nepalese Rupees through credit to her/ his bank account maintained with the subsidiary of State Bank of India in Nepal (Nepal SBI Bank Limited) or through an agency arrangement.
The enhancements to Indo-Nepal remittance facility scheme are expected to boost trade payments between the two countries, as also to facilitate person-to-person remittances electronically to Nepal.
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