August 31: Nepal Rastra Bank (NRB) has removed the inter-bank charges for ATM transactions and also reduced the limits on payment.

Nepal Rastra Bank has amended the Unified Directives on Payment System-2077 to remove the inter-bank charges on ATM transactions.

Nepal Rastra Bank has directed the banks to not charge any fee for ATM transactions as it is difficult for the general public to go to their respective banks due to the coronavirus pandemic. Executive Director of NRB Bhuwan Kadel informed that banks and finance companies have been instructed to not charge the users any fee for using their ATM cards in any other banks in the country.

The limit for electronic transactions through debit cards has been set at Rs 25,000 per transaction and Rs 100,000 per day. The monthly limit for payment through debit cards is set at Rs 400,000.

Banks and finance companies used to set their own monthly limits earlier. Executive Director of the Payments System Department Bhuwan Kadel said that such limits are being set to create uniformity. “The previous arrangement showed that a large sum of Rs 3 million could be withdrawn per month with the daily limit of Rs 100,000. However, banks had set their limits lower than this. This is why we have set a weekly limit of Rs 100,000 and a monthly limit of Rs 400,000,” he told New Business Age.

NRB has also directed banks to clearly state the issuance charge, service charge, and interest and compensations in the customer’s contract while issuing electronic payment cards. Renewal fee should also not be charged before the expiration of such cards. Nepal Rastra Bank has also directed the banks and financial institutions to inform their customers 15 days prior to the expiry of the card and about the card renewal fee through SMS.

According to the central bank, the financial institutions that have already operated the electronic payment card services but haven’t applied for its permission will have to submit an application by mid-January 2021 along with their policies and procedural arrangements. The name and phone number of the concerned employee, and the name, address and phone number of the concerned company also needs to be clearly mentioned in English and Nepali in the ATM booth in case the customer needs to inquire somebody about the transactions in the ATM.

Branchless banking, which has become effective nowadays, can be done by banks and finance companies without taking permissions from Nepal Rastra Bank. However, they will need to give information about this to the Payments System Department. Permission needs to be taken from Nepal Rastra Bank if such banking is about to be shut down.

Banks can provide branchless services to their account holders outside the metropolitan and sub-metropolitan city with the use of smart or magnetic cards in ‘Point of Transaction’ machine with the help of their own institution or agents appointed by the institution. Customers can deposit cash in their account, make payments and remittances, get their bank statements, pay the approved loan and pay their installments through branchless banking.

Executive Director Kandel stated that while branchless banking was not previously permitted in areas where many banks and finance companies had opened, it is currently permitted in any area except metropolitan and sub-metropolitan cities.