RBI raises Indo-Nepal NEFT transaction ceiling to Rs2 lakh, removes cap of 12 remittances a year
27 August 2021
Reserve Bank of India (RBI) has decided to review the scheme in order to boost trade payments between the two countries, as also to facilitate person-to-person remittances electronically to Nepal.
Accordingly, the ceiling on remittance per transaction has been raised from Rs50,000 to Rs2 lakh. RBI also removed the cap of 12 remittances in a year per remitter.
However, for all remittances by way of cash from walk-in customers or non-customers banks will keep the ceiling of Rs50,000 per remittance with a maximum of 12 remittances in a year.
The charges for transactions up to Rs50,000 will continue as applicable at present while for transactions beyond Rs50,000, the charges prescribed by SBI will apply.
The banks have been asked 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.
RBI launched the Indo-Nepal Remittance Facility Scheme (Scheme) 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 the National Electronic Funds Transfer (NEFT) ecosystem available in the country for origination of such remittances and entailed a ceiling of Rs50,000 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 (SBI) in Nepal, ie, Nepal SBI Bank Limited (NSBL) or through an agency arrangement.