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Nepal, India Sign Agreement for Cross-Border Digital Payment


  • Nepal and India sign an agreement for cross-border digital payment.
  • The agreement aims to facilitate fund transfers and merchant payments between the two nations.
  • The collaboration will integrate India’s UPI with Nepal’s NPI.

Nepali and Indian citizens may soon be able to make payments in both countries using their respective country’s digital payment applications, as both nations have signed an agreement for cross-border digital payments.

Neelesh Man Singh Pradhan (left), CEO of NCHL, and Ritesh Shukla, CEO of NIPL exchange a memorandum of agreement.
Neelesh Man Singh Pradhan (left), CEO of NCHL, and Ritesh Shukla, CEO of NIPL exchange a memorandum of understanding.

Neelesh Man Singh Pradhan, CEO of Nepal Clearing House Limited (NCHL), and Ritesh Shukla, CEO of NPCI International Payments Limited (NIPL), signed a memorandum of understanding (MoU) in the presence of Nepali Prime Minister Pushpa Kamal Dahal ‘Prachanda’ and Indian counterpart Narendra Modi during the ongoing state visit of Prime Minister Dahal to India. The signing took place at Hyderabad House, New Delhi on Thursday, June 1, 2023.

NIPL serves as the international arm of the National Payments Corporation of India (NPCI), an umbrella organization responsible for operating retail payment and settlement systems in India.

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The collaboration aims to establish cross-border connectivity for financial transactions between the two countries to ease fund transfers and merchant payments by users including students, pilgrims, and travelers.

In the collaboration between NIPL and NCHL, they will integrate India’s Unified Payments Interface (UPI) with Nepal’s National Payments Interface (NPI).

UPI, developed by NPCI, enables real-time inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions, facilitating interoperability among multiple banks, in India.

Similarly, Nepal’s NPI, a similar system developed by NCHL, facilitates seamless interoperability among various banks in Nepal, enabling real-time instant payments.

NCHL says that the initial engagement will be for inward and outward transfers between the banks in India and Nepal, utilizing the UPI and NPI systems. Subsequently, the scope will be expanded to include other types of merchant payments.

As per the terms of the MoU, NCHL and NIPL will collaboratively establish the necessary technical integration, legal and compliance structures, and business aspects for facilitating cross-border transactions. A definitive agreement will be entered into between the entities for each specific use case before its implementation.

Transaction limits, transaction fees, and other control aspects for each use case will be determined after a thorough consultation and necessary approvals from the respective central banks.

National Payments Corporation of India (NPCI) is an initiative of the Reserve Bank of India (RBI) — India’s central bank — and the Indian Banks’ Association (IBA) for creating a payment and settlement infrastructure in India.

NPCI International Payments Limited (NIPL) is a wholly-owned subsidiary of NPCI established with the purpose of expanding its product offerings to the global market.

Nepal Clearing House Limited (NCHL) was established under the leadership of Nepal Rastra Bank, the central bank of Nepal, with the active participation of all banks and financial institutions in Nepal.

NCHL operates multiple national payments, clearing, and settlement systems in Nepal, including the Retail Payment Switch (RPS) and the domestic card scheme NEPALPAY.

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